Tax Year Prior to 2020: Deduction for caregiving

[jrh70]

My parents are paying for people to care for them 24x7.  We are writing checks from their account to people who are basically self-employed.  They don't work for a company.  One person created a company knowing we were going to try to deduct the expenses and the others are just charging us a fee for sitting with them and feeding my parents.  They are not medical professionals.  1)  Do I need to create 1099s and issue them to our caregivers if we want to deduct their cost?  2)  Can I deduct the expenses on my parents taxes?  3)  How can I deduct it in Turbo Tax?  4)  Can I include what they pay in their medicare supplement, medicines, etc..as medical cost along with what the care givers are charging?  They make less than 36k per year from social security and their retirement income.  Thanks in advance for the help!

[ColeenD3]

This is deductible as a medical expense, along with your other medical expenses such as medicine, supplies and medicare supplement.

You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.

You do not need to issue them 1099-Misc, however, depending on the circumstances, they may be Household Employees. If they do this service for multiple people or are in the business of doing this work, they are not your employees.

Don't be confused by the term, "nanny". It applies to all Household Workers.

 If you paid your nanny $2,100 or more in 2019, you should withhold and pay Social Security and Medicare on all of her wages. If you paid your nanny $1,000 or more in a quarter in 2019, you must pay the federal unemployment tax, or FUTA. (You may also owe state unemployment taxes.)

Generally, for 2019 an employer needs to pay Social Security and Medicare taxes for “cash wages” of $2,100 or more paid to any one employee. Cash wages refer to checks, money orders and the like. They don’t include “the value of food, lodging, clothing, transit passes and other noncash items you give your household employee.” But cash given to an employee in place of those items counts as cash wage.

[jrh70]

Thanks!  I am sure one of the people does this type of work and in the past has done it for other people.  Not sure if they are doing it for someone else at the same time.  They just opened a company this year because we told her we would try to claim the deduction.  Does this change anything?  We pay this person the most money because that person is there usually 15 hours a day(overnight, gives them meds and helps with baths, etc..) for 5 days a week.  

[ColeenD3]

Look at the link I gave you regarding payment amounts. Her opening a business doesn't automatically exempt her from being an employee, especially if the only reason she did it was to accomodate you.

For example, if you hire someone to cut your grass, but he has many other customers, he is not your employee. If this person works for you but is not providing these services for other people and the amount you pay her is over and above the amount in the Household Worker article above, then she is your employee.

[efshoji]

My wife used Adult Day Care and Care Home services the past year.   Are these costs deductible  for income purpose?     

Ernest  Shoji

[VictorW9]

Adult day-care is considered a medical expense and would be deductible as an itemized deduction on Schedule "A" of Form 1040.