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“Assisted living” costs might be deductible on your taxes

assisted-livingIf you live in an assisted living facility – or have a family member who does – you know that the costs continue to rise every year. But did you know some of those costs may be tax-deductible?

Medical expenses, including some long-term care expenses, may be deductible (at least in part) if they are more than 7.5 percent of your adjusted gross income.

Generally, people who are reasonably healthy can deduct only the medical component of their assisted living costs; they can’t deduct the cost of room and board. The assisted living facility is responsible for telling you what portion of your fees is attributable to medical costs. On the bright side, “medical costs” can include a portion of an entrance or initiation fee if a portion of that fee is dedicated to medical expenses.

In some cases, though, a resident can deduct room and board and other ordinary living expenses. In order to claim this larger deduction, the resident must be chronically ill and in the facility primarily for medical care, and personal care services must be provided under the guidance of a licensed health care provider.

However, you can’t deduct expenses that are reimbursed by insurance or other programs.

In some circumstances, adult children may get a tax deduction if they contribute to assisted living costs for a parent or other immediate family member, including an in-law. The adult children must provide more than half of the family member’s total support for the year, and may have to meet other requirements.


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