How much of assisted living costs are deductible?

[partymom44]

Dad (89) is in assisted living.  He has Type 2 diabetes & vascular dementia. A home health nurse comes in 3x's a day to supervise him testing his blood sugar & then administering an appropriate dose of insulin.  She also supervises him taking his meds.  He wouldn't remember to do any of this without supervision. He still bathes & dresses on his own.  He cannot cook for himself (he wouldn't remember to do it), or clean.  He cannot take himself to any appointments as he cannot drive. Under IRS rules, would he be able to deduct all of the assisted living expenses including rent & food?

[Phillip1 · Accepted solution]

The medical deduction for assisted living includes all the expenses if the primary reason for living in a facility is for medical care. See the following from IRS Publication 502:

Nursing Home

You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care.

Don't include the cost of meals and lodging if the reason for being in the home is personal. You can, however, include in medical expenses the part of the cost that is for medical or nursing care.

[poohjustis]

If someone is living in a nursing home because of a medical need, moving from an assisted living apartment with medical support to a 24 hour care facility, is the full cost of the nursing home/24 hour care facility deductible?

[DoninGA]

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@poohjustis wrote:

If someone is living in a nursing home because of a medical need, moving from an assisted living apartment with medical support to a 24 hour care facility, is the full cost of the nursing home/24 hour care facility deductible?

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IRS Publication 502 Medical and Dental Expenses page 12 - https://www.irs.gov/pub/irs-pdf/p502.pdf#page=12

Nursing Home
You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care.
Don't include the cost of meals and lodging if the reason for being in the home is personal. You can, however, include in medical expenses the part of the cost that is for medical or nursing care.

[Critter]

FYI ... most assisted living facilities report the % of how much of the monthly fees are considered medical for the tax return ... just ask for it in January.   Once a person moves to full care the fees are 100%. 

[carolntim]

This is what I was told by the financial director my Dad's continuous care retirement community, where he is currently in independent living: that he could deduct a portion of his monthly fee as a medical expense and that they send out a letter in January specifying how much.  But she said that is all they send.  There is no tax form generated that shows the monthly fee that he paid to this qualifying facility.  So how does he prove that this amount qualifies as a medical expense?

[MaryK4]

If the letter specifies the amount, that is all you really need for the IRS.

@carolntim

[carolntim]

The letter specifies the percentage that can be deducted, not the amount paid.

[Critter]

YOU must do the math yourself ... there is no IRS form or worksheet in the TT program   ... so if it costs $60,000 per year for the facility and the letter tells you 50% is for medical then you will enter $30K  as medical expenses ... it is just that simple.  

[carolntim]

I'm not concerned about doing the math.  But if the letter just says you can deduct 50% and you calculate 50%, how does the IRS know what you are calculating 50% of?

[Critter]

They don't .... only IF you are audited will  you have to show them how you computed that deduction amount just like proving any other figures  you list on the return. 

Most items listed on a Sch A do not have a tax reporting form issued.

The IRS takes your word that you are entering the correct amounts and only if you are audited will you have to show your receipts like for all medical and charity expenses. 

[carolntim]

I see.  I have no experience with being audited and hope my Dad doesn't have to be audited for the first time in his late 80s.  By the way, for those of you, who like me, have a parent in Independent Living in one of these facilities and are primarily receiving room and board for the large monthly fee and are wondering how any portion of this fee can possibly count as a medical expense, I did find the following on the IRS web site.  Apparently, the monthly fee is considered an advance payment for medical care to be received in the future:

Lifetime Care—Advance Payments

You can include in medical expenses a part of a life-care fee or "founder's fee" you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care. The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. You can use a statement from the retirement home to prove the amount properly allocable to medical care. The statement must be based either on the home's prior experience or on information from a comparable home.

[Stevehofwa]

Ok, I’m actually looking into amending a return.  My father(86) suffered a breakdown and tried to kill himself.  Went to the hospital for a while, and then was moved to an assisted living facility from his home, where we hired people to watch him for a few weeks, on the advice of the hospital physician.   Things settled down, but he remained at the assisted living facility with some hired help/supervision until his death(natural) the next year.  In the year if the incident, the home health aide costs were deducted, as well as the fee the assisted facility charged for monitoring medications, etc, which was extra.  He did not require bathing help, help eating, bathroom, etc., and we hired the health aides to assist otherwise.  Is all or part of the assisted living room and board deductible?

[Critter-3]

Again the facility should be able to give you the information you require. 

As for help you hire outside of the facility read the IRS info here: 

https://www.irs.gov/pub/irs-pdf/p502.pdf

[tagteam]

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@Stevehofwa wrote:

Is all or part of the assisted living room and board deductible?

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If the principal reason for your father being in the facility was to receive medical care, then the cost of meals and lodging is deductible.

See https://www.irs.gov/publications/p502#en_US_2020_publink1000178988