Assisted living is not a deductible medical expense unless you follow all the rules.
You may deduct expenses for medical care. This includes nursing care, meaning the type of service usually provided by nurses (such as providing medication, assistance with bathing, toileting, etc.). You can't deduct expenses for companionship, security, room and board, laundry services, and so on.
If a person is in a nursing home for a medical reason, the entire cost can be taken as a medical expense. But assisted living is not a nursing home, as the care is usually provided at a much lower level. The facility will usually tell you that only a percentage of their cost counts as a medical expense.
To deduct the entire cost of assisted living as a medical expense, you must meet three tests:
1. The patient must have a chronic or long-term illness that will last at least one year or is expected to lead to death, as certified by a doctor.
2. The patient must require assistance with 2 or more activities of daily living (ADLs are eating, dressing, bathing, toileting, transferring, and managing continence) OR the patient must have a cognitive impairment so that they are a danger to themselves or others if left alone.
3. The care at the assisted living facility must be 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 annually.
Most people with loved ones in assisted living don't complete step 3, meaning the care is not a deductible medical expense. You will want to take care of this as soon as you can.
