Assisted Living Deductions

[WareagleFan21]

Doing my father's taxes who is 97 and has lived in assisted care facility for several years. This is the first year he has not done his taxes by himself and me having to help him. Where would I apply the deduction for the facility monthly expense? He is not a dependent on any other taxes. I would think that it is associated with medical expenses which I would also add insurance premiums and medical expenses not cover as well.

 I'm I correct in that aspect? 

[Opus 17]

Only medical expenses are deductible as medical expenses.  Costs for room and board, laundry and cleaning and so on, are not deductible.  

If he is in a nursing home mainly for medical care, the entire cost is a deductible medical expense. 

If he is in an assisted living facility mainly for his own convenience, he can only deduct actual medical expenses, including nursing care.  Nursing care does not have to be provided by an actual nurse but must be the kind of service usually provided by a nurse, such as administering medication, or providing assistance with eating, dressing, bathing and so on.  Costs for room and board, laundry and cleaning services, etc. are not deductible medical expenses.  The facility should provide a breakdown of their costs and what portion of their costs count as nursing care. 

If he is in an assisted living facility due to a chronic illness or cognitive impairment, the entire cost of the facility can be deducted as a medical expense if 2 conditions are met:

1. He is chronically ill and can't perform 2 or more activities of daily living without assistance, or has a cognitive impairment and requires constant supervision to prevent him being a danger to himself or others, either of which is certified by a doctor.  Activities of daily living are eating, bathing, toileting, dressing, transferring, and continence.

2. His care is provided according to a written care plan developed by a qualified social worker or health care professional that is reviewed at least annually.

Most facilities will have a nurse or social worker on staff who can prepare a written care plan that meets the requirements. 

Insurance premiums paid out of pocket, as well as out of pocket medical expenses for medications and co-pays, are also deductible of course.

There is an overall 7.5% "floor" to this deduction so the entire amount won't be deductible, and he must itemize his deductions to get any benefit.  Turbotax will do the math for you on this. 

[cornyb4]

Ty for that answer to the other question. My dad lived in assisted living in the memory unit.  He could not perform several activities for himself like, transfers, showers, incontinence, going to the bathroom, and eating. He could not live on his own at this point.

We had the following types of expenses:

(1) normal room and board

(2) facility Level 4 assistance from nurses and CNAs

(3) third party care givers to help with eating, bathroom, turning TV on / off, getting up from chairs and not falling out of the bed at nights

Would all these expenses be deductible under Schedule A, medical expenses.

[MarilynG1]

Yes, since your dad requires assistance with at least two activities of daily living in a memory care unit, all his expenses would qualify as a medical deduction.  You should keep a copy of a care plan provided by the facility, as well as receipts from the third party providers. 

Here's more into on Memory Care Expenses.

@cornyb4 

[Opus 17 · Accepted solution]

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@cornyb4 wrote:

Ty for that answer to the other question. My dad lived in assisted living in the memory unit.  He could not perform several activities for himself like, transfers, showers, incontinence, going to the bathroom, and eating. He could not live on his own at this point.

We had the following types of expenses:

(1) normal room and board

(2) facility Level 4 assistance from nurses and CNAs

(3) third party care givers to help with eating, bathroom, turning TV on / off, getting up from chairs and not falling out of the bed at nights

Would all these expenses be deductible under Schedule A, medical expenses.

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As described above, nursing expenses are always deductible, if the facility gives you a breakdown (#2 in your list.)

The entire expense of assisted living can be deducted if there is a written care plan developed by a doctor or other qualified person.  If there is no written care plan today, then you can only deduct past nursing expenses, even though he otherwise qualifies (the written care plan is important in the regulations). But if you get a written care plan, all of his future expenses could be deducted.