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What percentage of assisted living facility costs are deductible for my dad, who is legally blind?

The facility provides meal prep and nurses monitor his vitals and dispense his medications at the proper times.

2 Replies
Level 10

What percentage of assisted living facility costs are deductible for my dad, who is legally blind?

In order for assisted living expenses to be fully tax deductible, the resident must be considered "chronically ill." This means a doctor or nurse has certified that the resident either:

  • 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)
In addition, to qualify for the deduction, personal care services must be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse, or social worker must prepare a plan that outlines the specific daily services the resident will receive. Though not required by law, most assisted living facilities prepare care plans for their residents.

Generally, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not. However, if the resident is chronically ill and in the facility primarily for medical care and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital. If the resident is in the assisted living facility for custodial and not medical care, the costs are deductible only to a limited extent. In any case, the expenses are not deductible if they are reimbursed by insurance or any other programs.

Residents who are not chronically ill may still deduct the portion of their expenses that are attributable to medical care, including entrance or initiation fees. The assisted living facility is responsible for providing residents with information as to what portion of fees is attributable to medical costs.

In some circumstances, adult children may also get a tax deduction if their parents or other immediate family members (including in-laws) live at an assisted living facility and qualify as their dependents. The family member must be a U.S. citizen or legal resident or resident of Canada or Mexico and the adult child must provide more than half of the family member's support for the year. Even if the adult child is not paying more than half the family member's total support for the year, the child may still be eligible for a deduction if he or she contributes to the family member's support according to a "multiple support agreement." The adult child must pay more than 10 percent of an individual's total support for the year, and, with others who also support the resident, collectively contribute to more than half of the resident's support. All those supporting the individual must agree on and sign a Multiple Support Declaration.

You will not get the benefit if you are taking the standard deduction.

If you itemize deductions, you will only be able to take total medical expenses that are greater than 7.5% of your adjusted gross income.

To enter your medical expenses in TurboTax, please follow these steps:

  1. Click on Federal > Deductions & Credits 
  2. In the Medical section, click on the Start/Revisit box next to Medical Expenses
  3. If you haven't yet entered any medical expenses, TurboTax will ask you if your total medical expenses exceed a certain number.  [That's the 7.5% AGI mentioned above.]    
  4. If you think your total medical expenses will exceed that number, click the blue Yes box and continue through the interview, entering the requested information on your medical expenses.
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What percentage of assisted living facility costs are deductible for my dad, who is legally blind?

Thank you.  This was very helpful.

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