@bellasmygirl9 wrote:
My dad gets his pension from Ford’s, and he’s on Social Security disability. I do believe Ford’s does take taxes out on him. His total income for the month is approximately $3800 and his monthly payment is approximately 3875 a month so it’s literally taking every single penny. He makes to keep him there. The facility sent us a paper stating we could claim $1100 for last year, perhaps that’s not correct but that’s the way the paper reads if you think that this might be an impossible thing then I will have to check with the facility once again. Thanks for your input.
Let's start fresh.
(And when I say "your father owes tax" or "your father can take a deduction", that would also apply if you a filing his tax returns for him.)
First of all, your father owes income tax on all his income, even though it is being used for a memory care facility. Imagine if instead, your father received his social security and pension, and then wrote checks for a mortgage, a cook to provide meals, and a maid to keep the house clean and do his laundry. He reports all his income as taxable, he gets credit for any taxes that were withheld by the pension payer, and might owe more tax or get a refund, depending on the taxes owed and withholding.
Next, your father can take an itemized deduction for medical expenses. Whether that actually reduces his tax will depend on his total other itemized deductions.
Then we have to ask, what are allowable medical expenses. That would be drugs, co-pays, doctor and hospital fees, and so on. Assisted living is normally not a medical expense. He can deduct the portion of his assisted living fees that correspond to medical services. Usually the facility will provide a statement.
However, he can deduct the entire cost of the assisted living facility if he meets three tests.
1. He is chronically ill with a physical illness or a cogntive impairment
2. He requires assistance with 2 or more activities of daily living. ADLs are eating, dressing, toileting, bathing, transferring, or managing continence.
3. Care is provided according to a written care plan that is developed by a qualified medical professional or social worker and that is reviewed and updated at least once a year.
Depending on his cognitive condition, he might qualify to deduct the entire cost of the facility now, or maybe that will come later if his condition progresses. But the written plan is a key step. Once he meets those conditions and you have a written plan, the entire cost becomes a deductible medical expense.
