Yes, the social security benefit and pension are still taxable income and must be reported on a tax return. If tax is owed, he should be able to pay that from his pension or benefit before the rest goes to the nursing home. (The nursing home should make allowances for the taxes.). Check with the nursing home business manager. He may want to have taxes withheld from social security and the pension by the payers, before the rest is sent to the nursing home.
The nursing home expenses he pays out of pocket (the after-tax amount that is assigned to the nursing home) can be listed as itemized deductions for medical expenses, but he may not actually see a tax reduction depending on the amount of the pension and other income.
