In Colorado, caregiver expenses are not directly deductible from your state income taxes. However, there are some federal tax benefits that may help offset the costs of caring for your parents:

Federal Tax Deductions:

• Medical and dental expenses: You can deduct qualified medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI) in the tax year. This may include certain costs associated with caring for your parents, such as:
  • Out-of-pocket medical expenses: Co-pays, deductibles, and non-reimbursed medical bills for your parents may qualify if they are medically necessary and prescribed by a doctor.
  • Long-term care insurance premiums: Premiums paid for qualified long-term care insurance policies may be partially deductible.
  • Expenses for caregiving services: In some cases, expenses for in-home care or adult daycare services may be considered medical expenses if they are prescribed by a doctor and intended to treat a chronic condition.
• Documentation is crucial: Keep detailed records of all caregiving expenses, including receipts and invoices, to support your deductions when filing taxes.
• Consult a tax professional: The specific tax implications can vary depending on your individual circumstances and the type of care provided. It’s recommended to consult with a qualified tax professional for personalized advice on maximizing your deductions and potential tax benefits.

Colorado Tax Credit:

While not directly related to caregiver expenses, Colorado offers a tax credit for family caregivers providing care for a qualified individual. This credit can be claimed against your Colorado income tax liability and can help reduce your overall tax burden.

Here are some resources for further information:

Internal Revenue Service (IRS): Provides information on various tax deductions and credits, including those related to medical expenses and caregiving.
Colorado Department of Revenue: Offers details on state income taxes and available credits in Colorado.
Remember, tax laws and regulations can be complex, and seeking professional guidance from a tax advisor is recommended to ensure you are claiming all available deductions and credits accurately and effectively.