Deducting Medical Expenses of Parents and Relatives Not Living With You
The deduction for medical expenses under Section 213 states that there shall be allowed as a deduction for expenses paid for medical care of an individual as well as that individual’s spouse, qualifying child of the household, or qualifying relative as determined under Section 152.
What dependents qualify under Section 152? Qualifying children and, more importantly, qualifying relatives. Now, this is the critical difference between the two: while the term “qualifying child” requires that the child lives with you in order to claim medical expenses, there is no such requirement for “qualifying relatives.” More importantly, Section 213 eliminates the requirement that the “qualifying relative” make less than $4,050.
So what is a “qualifying relative” for purposes of the medical expense deduction under Section 213? This would be a person, regardless of their income, for whom you provided more than half their support, and is related to you as a child, grandchild, brother, sister, stepbrother, stepsister, parents, grandparents, stepparents, nieces, nephews, aunts, uncles, sons-in-law, daughters-in-law, fathers-in-law, mothers-in-law, mothers-in-law, or sisters-in-law. There’s also an exception: a “qualifying relative” can also be an entirely unrelated person as long as that person lived with you for more than 183 days. This can include a girlfriend, boyfriend, or best friend.
So let's break down these requirements to really drive the point home. Let's first start with the most common scenario, which is going to involve a taxpayer's parents.
Section 213 disregards the income of a “qualifying relative,” but it still takes into account whether you provided more than one half of that person's support during the year. This was added because it is typical for elderly parents to have social security income, so Congress did not want their Social Security income to inhibit the ability of a child to claim a deduction for the medical expenses paid.
Example 1. Mother and father live in the mountains of Montana. Their son lives and works in New York City. Their son pays all of their medical expenses. If the son can establish that he provides more than half of their support, then, despite the fact that he lives hundreds of miles away in a different state, he may claim a deduction for all of the medical expenses he paid for his parents even though he does not claim them as dependents and his parents file their own separate tax return.
Example 2. Joanna and Alicia are best friends. Alicia becomes terribly ill in February, loses her job in March, is evicted from her apartment in April, and has no family to depend on. Joanna let’s her move into her home in May. Alicia stays until December when she recovers, finds a job, gets her own apartment again, and moves out. She lived with Joanna for more than 183 days. During her stay, Joanna paid $8,000 in medical expenses for Alicia. However, Alicia had income in January, February, and December, so she files her own tax return. Joanna does not claim her as a dependent. Nevertheless, Joanna is still entitled to claim all of the medical expenses she paid for Alicia even though Alicia files her own tax returns, moved out before the end of the year, and was not formally claimed as a dependent on Joanna’s tax return.
This is why you should always consult a real tax attorney instead of Google or an uneducated corner-market tax preparer.
Jewell v. C.I.R., 69 T.C. 791 (1978), acq. Recommended by IRS AOD 1978-78 (Mar. 22, 1978).