Can I claim my Au Pair costs as Medical Services Tax Deduction?

So this is actually an interesting question with some nuance to it. The IRS does allow medical expense deductions for certain types of care, but there are specific requirements that need to be met. For your situation, you'd need to determine what portion of the au pair's time is specifically spent on medical care for your child with developmental delays. Only that portion would potentially qualify as a medical expense. The regular childcare portion would not qualify as a medical expense, though it might qualify for the Child and Dependent Care Credit instead (which is often more valuable than a deduction). For the medical portion to qualify, you would need documentation from a medical professional stating that the care is necessary for your child's condition. You'd also need to track and document how much time the au pair spends providing medical care versus regular childcare.

After reading through this thread, I wanted to share something that really helped me in a similar situation. I was struggling with documenting my son's caregiver expenses for tax purposes, and figuring out what qualified as medical vs just childcare was giving me a headache. I found this service called taxr.ai (https://taxr.ai) that analyzed all my documents and helped me figure out exactly what portion of my childcare could qualify as medical expenses. It was super helpful because they have experience with these specific tax situations and could point to the exact IRS guidelines that applied to my case. They helped me understand how to properly document the medical care portion and even provided templates for the caregiver to track time. Might be worth checking out since your situation sounds pretty similar to what I went through.

Ok so I have to eat my words about being skeptical of taxr.ai. After looking into it more, I decided to give them a try with my own complicated situation (I have a home health aide for my mother who lives with us). I uploaded our care agreement and some medical documentation, and they actually identified about $7,400 of expenses I could classify as medical deductions that my regular tax guy had been missing for YEARS. They showed exactly which parts of the care qualified and helped me get proper documentation from our doctor. They also pointed out that in my case, I should be using both the medical expense deduction AND the dependent care credit for different portions of the expenses. Definitely worth checking out if you're dealing with the au pair classification issue.

I see a lot of people here trying to DIY this complicated tax situation, but honestly when I was in a similar position with my special needs child's caregiver, I couldn't get anyone at the IRS to answer my questions. Kept getting bounced around or disconnected after waiting for hours. I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS representative in about 15 minutes instead of the hours I was wasting on hold. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent was able to give me official guidance on my specific situation with the caregiver expenses and confirmed exactly what documentation I needed to keep. Totally worth it just to get a definitive answer from the source instead of trying to interpret the tax code myself.

Well, I'm man enough to admit when I'm wrong. After my skeptical comment, I decided to try Claimyr myself because I've been trying to resolve an issue with my tax transcript for weeks. I used the service yesterday and got connected to an IRS agent in about 22 minutes. My previous attempts had all ended in either disconnection after 1+ hour or being told to call back another day. The agent was able to address my question about dependent care expenses versus medical deductions (similar to the original poster's situation). She confirmed that with proper medical documentation, certain specialized childcare can indeed be partially classified as medical expenses if the care provider is performing medically necessary tasks. Definitely a timesaver if you need actual IRS confirmation on something complicated like this au pair situation.

Something that hasn't been mentioned yet is that you'll need to be treating your au pair as a household employee with proper payroll tax reporting (Schedule H) if you want to claim any of these expenses as deductions. The IRS is really strict about this - if you're not handling the employment taxes correctly, they'll deny related deductions. Make sure you're giving your au pair a W-2, not a 1099, and that you're paying employer taxes.

Has anyone actually successfully deducted au pair expenses as medical services before? My accountant told me that's a huge red flag for an audit. We have a similar situation but were advised to just take the Child and Dependent Care Credit instead.