As long as the costs are medically necessary, as defined below, they are deductible whether you paid an outside service or hired your own employee.
Generally, only a percentage of the expense can be deducted corresponding to the percentage of actual medical or nursing services that are performed. Nursing services do not have to be provided by an actual nurse, but they must be of the type and kind of service usually provided by nurses. This can include providing medication, and assisting with eating, dressing, toileting, and bathing. Any part of the cost that is attributable to housekeeping services, laundry, cleaning, preparing meals, or general companionship is not deductible. Your mother will have to allocate the costs of the service to medical and non-medical care, and only deduct the portion attributable to medical care.
There is a special set of rules that would allow her to deduct the entire cost of the home care aide. The entire cost is deductible if all 3 tests are met:
1. Your mother is permanently and totally disabled, or your mother has a cognitive impairment that requires that she be cared for to prevent her from becoming a danger to her self or others.
2. Your mother requires assistance with two or more activities of daily living. ADLs are eating, bathing, toileting, managing incontinence, transferring, and dressing.
3. The care was provided according to a written care plan that was developed by a doctor or a qualified medical social worker, and is reviewed and updated at least annually.
