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My dad is considering hiring my brother as an 8 hr a day caregiver for 12.50/hr. My brother would be a contract employee so my dad wouldn't have to worry about withholding taxes and insurance.

This will cost my dad about 25,000.00/yr. Will he be able to claim any of that expense on his taxes at the end of a year?

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I don't know how it works in the U.S.A. but here in Canada.. Yes.. absolutely he can claim those expenses on his income tax, they are a medical expense, he will need to provide your brother's social security number and basic info. to prove that he is actually paying out that money. The thing that is important to note is .. make sure your brother files the income he receives from your dad or the I.R.S. will be after him for not paying taxes on that earned income. Good Luck!
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caregiving expenses could only be claimed on federal taxes and usually seniors don't pay federal taxes.
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I would check this with a CPA, as far as I know caregivers, family or whatever are considered employees and withholding is expected.
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Consult with a tax preparer to see what the limitations and proof of employment are to best guide you on how this is handled and how this affects both your dad and brother.
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I did with my mom this year - still waiting on the refund though! Goes under medical expenses. I would be leery about filing it for a relative caregiver.
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Dad does pay taxes so being able to claim it on his medical expenses would be a big help. There's no way Dad, myself or my other brother think our older brother should quit his job and work to care for dad for free. Maybe an employment contract drawn up by a lawyer would help with tax purposes? My brother would definitely be claiming what dad pays him as income.
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Also, up here, my mum's accountant sent us a form with several medical questions on it that needs to be filled out by her physician stating her medical issues that require care and the accountant sends that to Revenue Canada and my mum gets an actual cash deduction as well as being able to use my salary as a "write off".
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