If you are paying a caregiver, you can include the entire cost of the care, including taxes. It's on publication 502, pages 11-12.
However, you can only deduct the percentage of the cost that is for nursing services. Nursing services do not have to be performed by a nurse, but they must be the type and kind of services performed by nurses, "This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient."
Companionship, laundry, meal prep, and other household services are generally not eligible, and you must determine the percentage of eligible costs.
However, if the person meets these two extra conditions, you can deduct the entire cost of long term care:
1. The individual is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence OR the individual requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment, and
2. Care is provided according to a written care plan prescribed by a qualified medical provider.
