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

Childhood Cancer Lantern
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Federal, exists in every state

Tax refunds and treatment-related deductions

Changes in annual earnings can change tax credits. High treatment costs can also make a medical deduction worth checking.

What it is

Changes in annual earnings can change tax credits. High treatment costs can also make a medical deduction worth checking.

Tax credits rise and fall at different income levels. A preparer can review federal credits using your full tax-year income. Qualifying medical expenses count toward a deduction only above 7.5% of adjusted gross income, and only if you itemize.

Rules
  • For tax years 2025 and 2026, Delaware’s earned income credit is available to a resident allowed the corresponding federal credit: choose either 20% nonrefundable or 4.5% refundable, not both. The separate child and dependent care credit is 50% of the allowed federal credit, capped by Delaware tax. These credits are claimed on the Delaware income-tax return; ordinary calendar-year due dates are April 30, 2026 for 2025 and April 30, 2027 for 2026. A preparer must check extensions and the separate refund deadline for an earlier year. A valid 2025 extension generally runs to October 15, 2026; it does not extend time to pay.
  • For tax year 2025, a maximum federal EITC of $8,046 produces calculated Delaware maxima of $1,609.20 nonrefundable or $362.07 refundable. These require three or more qualifying children and the maximum federal credit. A nonrefundable credit cannot exceed the applicable Delaware tax.
  • For the federal medical-expense deduction, only qualifying unreimbursed costs above 7.5% of adjusted gross income count. A preparer checks whether itemizing and any credit actually reduce your tax.
  • If spouses file a joint federal return but calculate Delaware taxes separately, the earned income credit goes to the spouse with the greater Delaware tax before that credit. The child and dependent care credit instead goes to the spouse with lower taxable income, capped by that spouse’s tax.
What you get
  • Federal credits, part of them refundable, paid on a filed return.
  • A choice of Delaware earned-income credits, plus a separate child and dependent care credit for eligible taxpayers.
  • A possible medical-expense deduction when qualifying unreimbursed costs are high enough to itemize.
What to keep
  • Every bill, insurance statement, parking, mileage and lodging record for treatment trips, from now.
If you decide to apply
  1. Gather treatment receipts and mileage records for the tax year.
  2. Ask your tax preparer to check Delaware credits along with your federal return.
  3. Ask a free tax-help service (VITA) or a qualified preparer to review credits and the medical deduction at filing time.

IRS free tax help (VITA) or a qualified tax preparer

Missed years
  • For an earlier-year refund, Delaware generally uses three years from the last prescribed filing date or two years from payment, whichever is later. Separate payment-lookback and extension rules apply; when no return was filed, a two-year payment rule applies. A preparer can check the actual year under 30 Del. C. §539.
Good to know

A credit, a refundable amount and a deduction are three different things; a preparer should check them before anyone promises a refund. Today’s benefit-screening income is not the tax-year figure.

Other details
  • Federal credits and deductions change by tax year; confirm the year’s figures when you file.
Official sources
Ask your social worker

“Could a free tax preparer explain the benefits and drawbacks of available credits and deductions, and help us decide what to claim?”

Why I’m asking: We want to claim any refund we are due in a year with different income and high bills.

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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