Raising a child with a disability presents unique challenges, and financial strain can often be a significant concern. The good news is that tax laws offer opportunities for families with disabled children to save on their tax bill. This article explores various tax-deductible expenses that can help reduce your tax burden.
Special Schooling Expenses
The cost of attending a specialized school designed to address a child’s learning disabilities can be deducted as a medical expense. This applies to schools that provide support in overcoming these disabilities and fostering appropriate social and educational skills.
There are some key points to remember:
- This deduction only applies to the extent that total medical expenses for the year exceed 7.5% of your adjusted gross income (AGI).
- The school’s primary focus should be on specialized resources to address the disability and enable the child to achieve normal education or living.
- Costs like meals and incidental ordinary education may be included if they are secondary to the school’s core purpose.
If a school doesn’t qualify as “special,” you might still be able to deduct the costs of specific programs or treatments aimed at the disability.
Beyond Hospitals: Deductible Expenses at Non-Hospital Institutions
The IRS recognizes certain expenses incurred at non-hospital institutions as medical deductions. These can include:
- Costs associated with maintaining a disabled child in a specially designed private home, following a doctor’s recommendation, to help them adjust to life in the community.
- Hotel stays with nursing services, if medically necessary after hospitalization.
- Room and board expenses at a halfway house with required psychiatric supervision for a child with mental health issues.
Medical Conferences and Travel for Care
Traveling for a dependent’s medical care can be a deductible expense. This includes:
- Conference registration fees and travel costs, if the conference directly relates to your dependent’s disability and your attendance is essential for their care.
- Transportation to another city for essential medical services, along with lodging costs up to $50 per night. However, purely recreational trips or vacations are not deductible, even if a doctor recommends them for general health improvement.
When using your car for medical reasons, you can deduct the mileage at the current IRS rate (21 cents per mile for 2024) or the actual cost of gas and oil (excluding repairs, maintenance, etc.).
Meals and Lodging for Medical Purposes
The cost of meals at a hospital or similar institution is 100% deductible if the primary reason for being there is medical care. Meals outside of inpatient care are generally not deductible.
Similar rules apply to lodging. The cost of lodging at a hospital or similar institution is deductible if the main purpose is medical care. Lodging away from home can also be included if:
- The lodging is essential for medical care provided by a licensed doctor or facility.
- The lodging is not considered lavish or extravagant.
- The primary purpose of travel is not personal pleasure or vacation.
The maximum deductible amount for lodging is $50 per night per person. This includes a parent traveling with a sick child, allowing up to $100 per night for lodging (but not meals) for both.
Vehicle Modifications for Disabilities
The cost of special equipment installed in a car to accommodate a disability, or the difference between a regular car and a specially designed wheelchair-accessible vehicle, can be deducted as a medical expense.
Home Modifications for Accessibility
Making your home accessible for a disabled family member can also qualify for medical expense deductions. This includes:
- Special equipment installed for medical care purposes.
- Reasonable improvements made to accommodate the disability, with the deductible amount being the cost of the improvement minus any increase in the property value.
It’s important to note that the modifications should primarily address the medical needs of the disabled individual. Additional costs for aesthetics or architectural enhancements are not considered medical expenses.
For documentation purposes, consider getting a letter from your child’s doctor outlining the recommended home modifications for their specific needs.
Child Care Credit
While not directly related to medical expenses, the Child Care Credit can provide tax relief for working families with disabled children. This credit allows a percentage (20% to 35%) of childcare expenses to be deducted, with limits based on income and number of children.
Nursing Services
The wages and other costs associated with nursing services for a disabled child can be included as medical expenses. These services can be provided in-home or at a care facility and may include medication administration, wound care, bathing, and grooming.
Important Note: This article provides a general overview and should not be construed as tax advice. It’s always best to consult with a qualified tax professional for personalized guidance on your specific situation.
By understanding these tax deductions, families raising a child with a disability can make informed decisions to minimize their tax burden and free up valuable resources to focus on their child’s well-being and care.
