What Assisted Living Expenses Are Tax Deductible?

Assisted living facilities, even those covered in part by insurance, can get expensive. But for many who wish to maintain their independence, it is a cost worth paying. That doesn’t mean you can’t try and take what discounts you can get. Tax deductions are the perfect example.

If you or a loved one is living in an assisted living facility, there may be some expenses that qualify as tax deductible.

Chronic Illness and Tax Deductible Status

Tax deductions are available to anyone in assisted living who has been diagnosed as chronically ill. Which means a doctor or nurse with diagnosing abilities has stated that the patient can’t perform at least two daily necessities for their self-care (cleaning themselves, using the toilet alone, eating, dressing, or transferring).

Patients must also show signs of cognitive conditions. That means some diagnosis involving dementia, either pre or post Alzheimer’s. This will be determined during an examination where the patient must score low enough on a point system to show a significant impairment.

Once chronic illness status has been established, the patient can apply for tax deductions as long as the followed assisted living plan is provided by a licensed medical practitioner.

Not all costs will be deductible. In most cases, the patient can only apply for deductions on medical care. The exception is if they have met all chronic illness qualifications, and are residing within a treatment center that is used primarily for medical treatment. If the medical center has an assisted living portion, it may qualify room and other expenses to fall under the deductions list.

Caregiver Deductions

Caregivers may also qualify for these deductions. However, that is only the case if they can show their loved one as a dependent, and that the caregiver is covering more than half of their expenses. The patient also cannot make more than $3,950.

If you are part of a collective of caregivers who are all providing financial support, you can deduct those expenses if the income requirement of the patient is met, and collectively the group covers half of the costs.

How To Get Your Deductions

Your best resource for many of the steps associated with tax deductions will be the administration at the assisted living facility. They will be able to direct you towards forms you need, paperwork you will have to gather, and financial records for your loved one’s care.

It may also be prudent to hire a tax professional or accountant who specializes in medical deductions. They will be able to find possible inclusions that you didn’t consider before.

Learn more about ways of supporting your elderly loved one at Ashford Utah.

Resources:

http://www.elderlawanswers.com/tax-deductions-for-assisted-living-costs-7184
http://www.aplaceformom.com/blog/2-11-14-assisted-living-tax-deductions/
http://www.seniorlivingresidences.com/financial-options/tax-deductibility/
https://www.irs.gov/publications/p502/ix01.html