Written by a parent, not a doctor. Nothing here is medical advice.

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Federal, exists in every state

Tax refunds and treatment-related deductions

A review of how annual earnings and treatment expenses affect federal tax credits and deductions, alongside California’s separate tax rules.

What it is

A review of how annual earnings and treatment expenses affect federal tax credits and deductions, alongside California’s separate tax rules.

A change in yearly earnings can raise or lower tax credits. Treatment costs can also matter if you itemize eligible unreimbursed expenses. California has its own return rules. The income used for a monthly benefit screen cannot calculate a tax-year credit.

Rules
  • The California figures here are for tax year 2025. Credits, medical itemizing and work-related child-care relief have separate tests. A cancer diagnosis alone does not establish a credit.
  • For tax year 2025, CalEITC can be up to $3,756. California earned income and federal adjusted gross income must meet the $32,900 ceiling and other rules. A qualifying return may also receive up to $1,189 in Young Child Tax Credit for a child under six. That amount is per return, not per child, and phases out above $27,425. Certain families with zero or negative earned income can qualify under additional wage and loss limits. California residency, SSN or ITIN, filing status and investment income also matter. Claim the credits on a California return with form FTB 3514, even if you otherwise do not need to file. The 2025 filing extension ends October 15, 2026. It does not extend payment time or automatically rule out a later valid refund claim.
  • Eligible unreimbursed medical expenses above 7.5% of adjusted gross income can be deducted only if you itemize. Ask the preparer to check the tax year and travel rates.
  • Refundable credits require a filed return even when no tax is owed.
  • For tax year 2025, the investment-income ceiling is $4,814. The Young Child Tax Credit’s zero- or negative-earned-income exception has separate total-wage and net-loss limits of $35,640 each. California residence must exceed half the year. Filing status, SSN or ITIN and the form’s other conditions also matter. Ask the preparer to check the return. Current monthly benefit-screening income cannot calculate the credit.
What you get
  • Federal tax credits, including refundable amounts where the return qualifies.
  • California tax provisions that fit the return, including the Young Child Tax Credit where eligible.
  • An itemized medical deduction for qualifying unreimbursed costs above 7.5% of adjusted gross income.
What to keep
  • Keep each treatment bill, insurance statement, parking receipt, mileage record and lodging record from now.
  • For eligible unreimbursed medical travel you paid in 2026, mileage is 20.5 cents through June 30 and 23.5 cents from July 1. Qualifying medical lodging can be limited to $50 per person per night. A necessary accompanying parent can be included under the applicable conditions. Ordinary meals, lost wages and routine sibling care are not medical deductions. You must still itemize and meet the 7.5% adjusted-gross-income floor.
If you decide to apply
  1. Have ready: treatment bills, insurance statements, mileage and lodging records.
  2. Ask a free tax-assistance site or qualified preparer to review both returns for the correct tax year.

Tax preparer or free tax-assistance site; California Franchise Tax Board · Official page ↗

Missed years
  • Earlier tax years may still be claimed. Each has its own deadline.
Good to know

A credit, a refundable amount and a deduction work differently. Ask a preparer to check them before relying on a refund. Today’s benefit-screening income is not the tax-year figure.

Other details
  • Federal credits and deductions change by tax year. Ask the preparer to confirm the year’s figures.
  • Medical lodging, mileage, employer dependent-care accounts and Medicaid caregiver payments have special rules. The preparer needs to check the applicable tax year.
  • An expected tax benefit alone is not a basis for taking money out of retirement funds or changing asset ownership.
Official sources
Ask your social worker

“Could a free tax preparer help us check credits and treatment-related deductions? What could we claim, what limits apply, and could you help us find a review and know which records to keep?”

Why I’m asking: I want to claim any refund we qualify for and understand which treatment costs matter on a tax return.

More background and detailed requirements
Additional program information and published rules

Who does what

The three parts, side by side. The agency decides; nobody on this page does.

You

Keep the mileage log, parking and lodging receipts and every medical bill; file even in a year you owe nothing.

Your social worker

Points you to a free VITA tax site and, if a parent is paid by Medicaid for home care, to the paperwork that marks that pay as excludable.

The care team

Records and letters when the application asks for them.

Who decides
The IRS, on the return you file
Ask your social worker
“Is there a free tax help site for families here? If a parent is paid through Medicaid for our child's home care, what paperwork marks that pay as excludable?”

How to apply

First step: Start a mileage and lodging log now, keep every medical bill, and ask the social worker for the free VITA tax site near you.

  1. Start a mileage and lodging log the week of diagnosis.
  2. Ask HR about the dependent-care account when a sibling needs paid care so a parent can work.
  3. File even in a year with no tax owed; the child tax credit and earned income credit can still pay.

Where it starts: Federal tax return; free VITA tax sites for lower-income families

What to gather

  • A mileage log with dates and destinations
  • Parking, toll and lodging receipts
  • Every medical bill and the insurance statements showing what you paid
  • The employer's dependent-care account form, if offered

How long: Settled on the tax return for the year. A refund follows filing.

What a yes looks like

A smaller tax bill or a refund that reflects the deduction and the credits.

What a no looks like, and the next move

The standard deduction beats itemizing: the mileage and lodging are then unused, but the child tax credit and earned income credit still apply.

Watch out

  • Throwing away the mileage log. Hospital trips at 20.5 cents a mile (January to June 2026) and 23.5 cents (July to December), plus parking and tolls, add up over a treatment year.
  • The lodging cap is $50 a night per person, meals not included, and only for stays needed for care at a hospital.
  • The $7,500 dependent-care account is for care that lets the parents work, such as a sibling's daycare. It is set up through an employer, usually at open enrollment or after a family change.
  • Not every Medicaid-paid wage is excludable. The exclusion is for care of someone living in the provider's home under a Medicaid program; ask the program for its form.
  • Retirement money is a last resort with tax costs. A medical hardship withdrawal does not itself waive the early-withdrawal penalty. The medical-expense penalty exception covers only qualifying expenses above 7.5% of adjusted gross income; ordinary income tax still applies to untaxed money.
  • The emergency personal-expense withdrawal exception has separate balance, annual and repeat-use limits. Ask the plan administrator or tax preparer before using it; penalty relief is not an exemption from ordinary income tax.

The numbers and the rules

The arcane layer, kept on purpose. Checked September 10, 2026.

What it is worth

Medical costs above 7.5% of income deductible if you itemize; mileage 20.5 cents (January–June 2026) and 23.5 cents (July–December); lodging $50 a night per person; dependent-care account $7,500; child tax credit up to $2,200 a child.

  • $7.5 (only the part above this counts, and only if you itemize) — Medical-expense deduction floor
  • $20.5 — Medical mileage, January to June 2026
  • $23.5 — Medical mileage, July to December 2026
  • $50 (an accompanying parent counts; meals do not) — Lodging away from home for care, per person per night
  • $7,500/year — Dependent-care account (FSA) limit, 2026
  • $3,750/year — Dependent-care account limit, married filing separately, 2026
  • $2,200/year (maximum; not a guaranteed refund) — Child tax credit per qualifying child, 2026

Legal protection: Pay from Medicaid to a parent who provides the child's home care in the same home can be left out of federal income (IRS Notice 2014-7, since January 3, 2014) · That excluded pay can still be counted as earned income for the earned income credit, all of it or none · Parking and tolls count on top of the mileage rate

What it costs the family: None. A free VITA tax site or a preparer can run the numbers.

The eligibility facts, as published

Deduction
itemizers; unreimbursed medical costs above 7.5% of adjusted gross income
Dependent care account
through an employer plan; care that lets the parents work; limited by earned income
Child tax credit
per qualifying child; maximum $2,200 in 2026
Notice 2014 7
qualifying Medicaid waiver payments to a provider living in the same home as the person cared for; not every Medicaid-paid wage

Decisions this site cannot make: The tax return

Expect friction on: Receipts and a mileage log · Itemizing versus the standard deduction

The trap: Throwing away the mileage log. The rate is 20.5 cents a mile for January to June 2026 and 23.5 cents from July; parking and tolls are on top. The lodging cap is $50 a night per person, meals not included.

What changes by state: Nothing here is state law. Some states add their own credits; a tax preparer or a free VITA site can check.

Where I read this

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