From the AARP newsletter:

Help for caretakers

• If you’re supporting your parents, you can claim them as dependents, even if they aren’t living with you. You do have to be paying more than 50 percent of their annual support, says Abe Schneier, senior technical manager of taxation for the American Institute of Certified Public Accountants. If several siblings are all contributing to Mom’s or Dad’s care and their total tops 50 percent, they can decide which sibling claims the parent as a dependent each year, and that can rotate or stay with the same sibling. The sibling who claims the parent must have provided at least 10 percent of the care. When you claim a parent as a dependent, you can add all of the parent’s deductible medical expenses to your own.

If you spend money on senior day care for your parents while you work, and if you claim them as dependents, you may qualify for a dependent care credit. That credit reduces your taxes by $600 to $1,200, depending on how much you earn, how many dependents you have and how much you spend on their care. You can’t deduct the cost of a caretaker as a medical expense if you’ve used it to claim this credit.

• Assisted living costs may be deductible. If your parents need to live in an assisted living facility to receive medical care, many of their costs, including room, rent and meals, become deductible—the rules are spelled out in the IRS publication 502. Those items are not deductible if they simply live there for comfort and convenience rather than for medical care, and some of their costs, such as for haircuts or pleasure outings, are not deductible at all. If your parent is your dependent, you can take those allowable deductions. If not, your parent can deduct them.