Assisted living expenses can be tax deductible if the resident is considered "chronically ill." This means they have been certified by a doctor or nurse as someone who:
• cannot perform at least two activities of daily living, such as eating, toileting, transferring, bath, dressing, or continence; or
• requires supervision due to a cognitive impairment (such as Alzheimer's disease or another form of dementia).
Additionally, the personal care services must be provided according to a plan of care prescribed by a licensed health care provider (doctor, nurse, or social worker)
Generally, only the medical component of assisted living costs is deductible. Ordinary living costs like room and board are not deductible.
• If the resident is chronically ill and in the facility primarily for medical care and has a certified care plan, then the room and board may be considered part of the medical care.
• If the resident is in the assisted living facility for custodial and not medical care, then only the medical portion of the costs are deductible.
The assisted living facility is responsible for providing residents with information as to what portion of fees is attributable to medical costs.
