topic Long-term care services in Deductions & credits

Long-term care services

shepherdtim — Tue, 16 Mar 2021 18:56:43 GMT

My handicapped brother has a care service that assist him

every day. This would seem to meet the long-term care service deduction but I am concerned about the stipulation that says "diagnosed as chronically ill in the last 12 months" and "evaluated every year to qualify". Who is doing this diagnosis and evaluation?

Re: Long-term care services

JoannaB2 — Tue, 16 Mar 2021 19:31:01 GMT

Yes, the person who's doing the diagnosis must be your brother's personal physician or an authorized person. Long-term care (LTC) insurance is a coverage that provides nursing-home care, home-health care, and personal or adult daycare for individuals age 65 or older or with a chronic or disabling condition that needs constant supervision. You can deduct only the amount of medical expenses (which includes long term care premiums paid) that exceed 7.5% of your adjusted gross income, if you qualify to itemize deductions.

Re: Long-term care services

Opus 17 — Tue, 16 Mar 2021 20:08:48 GMT

For expenses in the home, you can only deduct the cost of the assistant that is allocated to medical or nursing services. Nursing services do not have to be performed by a nurse, but must be the kind of services performed by a nurse, such as providing medications, and assistance with dressing, toileting, and so on. Cost allocated to housekeeping or companionship are never deductible.

The special rules for long term care apply to an assisted living facility, which does not sound like the case from your question. If someone is in an assisted living facility, they can only deduct medical care costs as well, and can't deduct costs allocated to room and board, laundry, housekeeping, etc. However, when someone is in assisted living and meets 3 conditions, the entire cost can be deducted. Those conditions are:

1. The patient is certified to have a long term or permanent disability, or a cognitive impairment so that they require care to prevent them from being a danger to themselves or others,

2. the patient requires assistance with 2 or more actives of daily living (ADLs are eating, drinking, bathing, dressing, toileting, transferring, and continence).

3. the patient gets care according to a care plan that is written by a qualified medical professional or social worker that is reviewed and recertified at least annually.

But again, care provided in the home is not covered by these rules. For an in-home assistant, you have to allocate the cost between medical and non-medical.