Tax Relief, or Lack Thereof, for the Long-Term Care Costs of the Aging Population in America
ABSTRACT: As the health and longevity of Americans continue to improve, adult children caring for aging parents—possibly at the same time as raising children of their own—is becoming a national phenomenon. This paper examines current and proposed income tax relief for taxpayers who provide financial support for the long-term care of an adult individual (e.g., parent of taxpayer). Four specific tax relief options are evaluated: dependency exemption, head of household filing status, medical itemized deduction, and dependent care credit. The current tax law is not structured to encompass the unprecedented issue of the long-term care costs of the aging population in the United States. In response, various options are introduced to advance the discussion of tax policy alternatives.