![]() ![]() These rules qualify for the resident or caregiver depending on who is incurring the expenses. An entrance fee that is intended to cover the cost of the initial assessment and development of the plan of care for the resident relates to medical care and therefore qualifies it as tax deductible under the definition. In homes specifically designed for the care of those with Alzheimer’s disease and related dementia, the care, meals and lodging is an integral part of the complete service plan which constitutes medical care. However, homes, which are dedicated to caring for people with Alzheimer’s disease and related dementia rendering substantial supervision to protect residents from threats to health and safety due to severe cognitive impairment, may qualify. This fee is intended to cover administrative processing and maintenance of the property, rendering it a non-tax deductible expense. Many of today’s assisted living communities charge an entrance or maintenance fee. (activities of daily living are eating, toileting, transferring, bathing, dressing, and continence) or 2) Requiring substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. If the individual is chronically ill, as defined under the section entitled Qualified long-term care services, all costs associated with the care and supervision of the individual may be tax deductible subject to the 7.5 percent limitation.Ī chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as: 1) Being unable for at least 90 days, to perform at least two activities of daily living without substantial assistance from another individual, due to the loss of functional capacity. “If the family chooses residential care for personal or family reasons, then only the portion of the cost attributable to medical or nursing cost is deductible.” “The key distinction is the purpose of living there,” said Brown. However, the portion of the cost of residential care related to medical or nursing care may be counted as a medical expense. The IRS does not allow the cost of meals and lodging to be deducted “if the reason for being in the home is personal,” according to IRS guidelines. This can include the cost of meals and lodging in the home if a principal reason for being there is to get medical care. “If you’re considering taking a deduction, you must consult a tax professional to ensure compliance with the IRS rules and to fully understand all the deductions to which you are entitled.”Īccording to IRS rules, a taxpayer may count “the cost of medical care in a nursing home, home for the aged, or similar institution” as a medical expense for himself or herself or for a spouse or other dependent. Brown offers these tips along with a caveat.Once you pay for eyeglasses, hearing aids, prescriptions, or other medical expense, you can reimburse yourself out of your FSA. Use Flexible Spending Accounts: If your employer provides one, a flexible spending account (FSAs) allows you to put aside pre-tax dollars for medical expenses.To do that, you’ll need to retain all receipts and/or documentation in order to establish that you meet the deduction requirement. ![]() You can only deduct medical expenses if they exceed 7.5% of your adjusted gross income and you itemize. If your loved one can’t travel alone, you can also deduct transportation expenses like mileage, parking, tolls, and even meals and lodging (if the travel is specifically to obtain medical care.) Itemize medical expenses: The cost of doctor visits, surgeries, lab work, and supplies such as false teeth or wheelchairs (if not paid for completely by Medicare) may be deductible.Also, if applicable, keep track of fees paid for in-home help such as nurses, therapists, and adult day care. Deduct fees for help: Medical expenses incurred for a relative in a nursing home or rehab – including a residential memory care facility - can be deducted, as long as the relative is your dependent.“The cost of dementia care may qualify as a deductible medical expense, but only in cases where IRS criteria are met,” Brown said.īrown offers these tips for caregivers for loved ones with Alzheimer’s or dementia:Ĭlaim your loved one as a dependent: You may do this if you provide more than half of the support for your family member. The answer: yes, in some cases, according to Randy Brown, Vice President of Accounting for The LaSalle Group, Inc., Autumn Leaves’ parent company. Families with loved ones living in Autumn Leaves Assisted Living and Memory Care communities often ask: Can we deduct the cost of dementia care on our tax returns?
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