@Leica Lover wrote:
We have a part time caregiver-three days a week for my wife who has dementia. She basically relieves me,
She assists with incontinence, medication, dressing etc. How much of her wage if anything can I deduct.
That depends.
Generally, you can only deduct the cost of nursing care. Nursing care does not have to be provided by a nurse, but must be the kind of services that a nurse usually provides, such as assisting with eating, bathing, going to the toilet, or taking medications. If the aide performs other services, you will have to allocate the cost based on the amount of time spent performing nursing services.
However, there is a special rule for chronically ill individuals. You can deduct the entire cost of the aide if you meet three tests:
1. the individual is chronically ill as certified by a doctor (has a long term illness that is permanent, or will last at least one year, or will lead to death.
2. the person requires assistance with 2 or more activities of daily living (ADLs are eating, dressing, bathing, toileting, transferring, and managing continence) OR the person requires assistance to prevent them from being a danger to themselves or others, due to cognitive impairment.
3. the care is provided according to a written care plan that is prepared by a qualified medical professional or social worker that is reviewed and updated at least once a year.
I suspect you don't have a written care plan, most caregivers don't know about this part. That would mean you have to determine what percentage of the time the aide performs nursing services, and that percentage of the cost is a deductible medical expense.
However, if you can get a visiting nurse or a social worker who specializes in dementia care to create a simple written care plan that includes the use of an aide, then the entire cost of the aide would be a deductible medical expense starting on the date the care plan is written.
https://www.irs.gov/publications/p502#en_US_2020_publink1000178977
Qualified Long-Term Care Services
Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are:
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Required by a chronically ill individual, and
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Provided pursuant to a plan of care prescribed by a licensed health care practitioner.
Chronically ill individual.
An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions.
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He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.
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He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
