When we think about caring for our aging family members, especially our mothers and fathers, we usually start with things that directly affect their comfort. Things like meals, quality bedding, and reliable caregivers who treat our loved ones with kindness, compassion, and respect. These things ensure that our fathers and mothers enjoy their day-to-day lives with little to worry about. However, there is another side of things when looking at assisted living.
These days it would be foolish not to consider every possible advantage when looking at the costs of long-term care. To that end, what would be the taxman’s take on assisted living, and can the associated expenses be deducted? According to the 1996 Health Insurance Portability and Accountability Act, those who require sustained, long-term care services such as assisted living may enjoy some tax deductible benefits. So the short answer is yes, but then what qualifies someone in an assisted living arrangement for tax deductions?
Is the Resident in Care Categorized as Chronically Ill?
This can be a delicate subject, although if there were a clear diagnosis, it would mean that assisted living costs would qualify. A doctor or nurse must have the care recipient certified as chronically ill within the past 12 months of residency. Furthermore, all personal care services must be provided according to a treatment plan, which would be prescribed by a licensed health care practitioner to qualify for tax deductions.
What Qualifies as Chronically Ill?
A good question; as we age, there are a number of illnesses that can impede or put a halt to our day-to-day activities. These do not always boil down to a single affliction such as severe arthritis. Often is the case that a patient has one or more ailments to manage and may not be able to overcome them alone. Categorically speaking, to qualify for certification by a doctor or registered nurse, a patient:
- Must be unable to perform at least two or more daily activities that are essential to everyday life, such as bathing, meal preparation and consumption, dressing, and going to the restroom unassisted.
- Requires intermittent supervision due to cognitive impairment such as Alzheimer’s disease or dementia.
One thing worth mentioning is that if an assisted living resident does not qualify as chronically ill, that is certainly not the end of the story. The facility of residence may provide a breakdown of costs either in practice or by request so that the medical aspect of assisted living may still be deducted. It would be the lodging and meals that would not qualify in this case.
Where do I go from here?
There is, of course, much more information out there. If you are looking to dive a little deeper, there are resources direct from the IRS (Medical and Dental Expenses) that covers nearly every question one might have. Also, for tax deduction limits per individual incomes, the American Association for Long-Term Care Insurance has some helpful tips.
For more information on long-term assisted living care for your loved ones, contact the experts at Colten Adult Care. Our team is always happy to answer your questions and address any concerns you may have.