Nursing home costs are tax deductible if the primary reason for residence in a nursing home is to receive medical care.
Which nursing home costs are tax deductible?
- Medical care
Note: If the primary reason for entering the nursing home is not to obtain medical care, only the portion of the fees directly spent on medical treatment are deductible — meals and lodging wouldn't be deductible
Which assisted living costs are tax deductible?
Assisted living expenses are deductible when a doctor has certified a patient can't care for themselves.
These individuals are unable to perform two or more activities of the following daily living activities:
- Managing incontinence
Assisted living expenses may also be deductible if an individual requires supervision due to a cognitive impairment, such as Alzheimer’s or another form of dementia.
To qualify for cost-of-living deductions there must be a plan of care prepared listing all of the services that the resident will receive to qualify for the deduction. The assisted living facility should provide residents with a statement showing what part of their fees is for medical costs.