Yes, there are hoops.
Normally, you can only deduct nursing or medical care. The care does not have to be provided by a nurse but it must the kind of services a nurse usually performs, such as assistance with medication, eating, bathing and so on. You can't deduct the cost of laundry services, housekeeping, meal preparation or general companionship. You will have to allocate the costs on a percentage basis depending on how the aides spend their time.
However you can deduct the entire cost of the aides if your mother meets three tests.
1. She is permanently disabled, or has a cognitive impairment that means she can't be left alone without becoming a danger to herself or others.
2. She requires assistance with 2 or more activities of daily living. ADLs are eating, bathing, dressing, toileting, transferring and managing incontinence.
3. Her care is provided according to a written care plan provided by a doctor or qualified social worker that is reviewed and updated at least once a year.
Without the care plan, you can only deduct the percentage of the cost that can be allocated to medical and nursing care. If you get a care plan, then the expenses would be fully deductible going forward.
It's important to understand the difference between a nursing home, and assisted living or home care aides. If a person is in a nursing home for medical reasons, the tax code allows you to assume the entire cost if for medical expenses. But at a lower level of care like an assisted living facility or a home care aide, the costs must be allocated to medical and non-medical activities unless those tests are met.
https://www.irs.gov/forms-pubs/about-publication-502
You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. 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. These services can be provided in your home or another care facility.
Generally, only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services.
Qualified Long-Term Care Services
Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are:
-
Required by a chronically ill individual, and
-
Provided pursuant to a plan of care prescribed by a licensed health care practitioner.
Chronically ill individual.
An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions.
-
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.
-
The individual requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
Maintenance and personal care services.
Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with the individual’s disabilities (including protection from threats to health and safety due to severe cognitive impairment).
