Providing care for a parent, grandparent or other older relatives can be rewarding. But it can also be expensive. Fortunately, some federal tax breaks can help ease the financial strain.

Claiming a Parent as a Dependent

While the term “dependent” typically prompts images of children, you may be able to claim a parent, in-law, grandparent or other relative as a dependent — the IRS term is “qualifying relative.” For 2014, that means a potential exemption of $3,950.

Not surprisingly, certain requirements must be met. For instance, with some exceptions, the dependent can’t have earned taxable income of more than $3,950 in 2014, excluding Social Security benefits and other tax-exempt income. He or she also can’t file a joint tax return. And you must cover more than half of the dependent’s costs for food, lodging, clothing, medical and dental care, and transportation, among other expenses.

Let’s look at an example. A daughter spends $5,000 to cover her father’s expenses. The father also contributes $5,000 in Social Security benefits and $500 in tax-exempt interest to pay for his expenses. The daughter can’t claim the father as a dependent, because her support wasn’t at least half the total ($5,000 + $5,000 + $500 = $10,500).

If multiple siblings jointly provide support for a parent, only one can claim the deduction. But only the siblings as a group have to provide more than half the parent’s support; the sibling claiming the exemption can individually provide less than half.

Even if all of the requirements are met, you might not enjoy the full $3,950 exemption. For example, the exemption begins to phase out when the taxpayer’s 2014 adjusted gross income (AGI) hits $254,200 ($305,050 for married couples filing jointly).

Medical Expense Deduction

It’s also possible to deduct some of the cost of a dependent’s medical and dental expenses. The deduction is limited to the extent to which these expenses — when added to the medical and dental expenses incurred by you and any other dependents — top 10% of your AGI.

There’s one exception, however: If you were born before Jan. 2, 1950, on your 2014 tax return, you can deduct medical and dental expenses that exceed 7.5% of your AGI.

The deduction doesn’t apply to expenses paid or reimbursed by insurance or other sources, such as a Flexible Spending Account or Health Savings Account. But it does include health insurance premiums. It also can include some nursing home expenses.

The Dependent Care Credit

You can employ this tax credit if it’s necessary to pay someone to care for a parent while you work (or look for work). But keep in mind that the parent must be incapable of caring for him- or herself and must live with you for at least half the year. Payments for care can’t go to your spouse or to another of your dependents.

Once these and other criteria are met, the credit can be worth up to 35% of qualifying costs for care up to a maximum of $3,000 for one dependent, or $6,000 for two or more dependents. However, the percentage is reduced based on your AGI, to a low of 20% if your AGI exceeds $43,000.

Maximizing your Tax Savings

As the size of our senior population grows and more children start taking care of their aging parents, it’s important to know what tax relief may be available. Your financial advisor can help you decipher the tax code, so you can maximize your savings