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Is Assisted Living Tax Deductible?

Like so many parts of life, taxes can change and become more complex as we grow older. Between changing living situations, retirement, adjusting investments and changes to Social Security, there are many things that create new questions about financial planning and taxes in our golden years.

One of the most common questions for seniors and their families relates to what part of paying for senior care, a senior community, long-term care or rehabilitation may be tax deductible. While many aspects of senior care require out-of-pocket payment and are not tax deductible, residents of assisted living communities may be able to deduct part or all of their care costs.

What Is Assisted Living?

Assisted living communities are designed for seniors who no longer want to live completely independently, but who also do not require the constant care that a nursing home would offer. Residents in assisted living often need assistance with some tasks, such as dressing or bathing, but are also able to maximize their independence through most of their daily activities.

Assisted living communities, such as River Crossing, offer residents their own apartments, as well as common areas and shared amenities. At River Crossing, residents enjoy courtesy transportation, daily senior activities, fitness programs, on-site church services, restaurant-style dining and access to an activity and game room. The supervision offered throughout the day helps residents to feel supported and safe, while the amenities and activities add fun and socialization to each day. Social and recreational activities are excellent ways for seniors to remain engaged in hobbies they have always enjoyed and to explore new interests.

Is Assisted Living Tax Deductible?

If you or a loved one lives in an assisted living community, some part, or all, of your costs may qualify for the medical expense tax deduction. According to the Internal Revenue Service (IRS), qualifying medical expenses that make up more than 7.5% of an individual’s adjusted gross income can be deducted from your taxes. The qualifications that must be met include:

  • The assisted living resident must be considered “chronically ill.” This determination can be reached in two ways:
    • The individual requires substantial supervision due to a cognitive impairment, such as dementia.
    • The individual is unable to perform at least two activities of daily living independently. The six activities of daily living are dressing, eating, transferring, continence, toileting and bathing.
  • The assisted living resident’s care must be provided by a licensed medical professional and must be dictated by a specified plan of care. Most assisted living communities develop an individualized plan of care using a needs assessment and input from the resident, medical team members and caregivers.

Additionally, if you have a senior in assisted living who is considered a dependent, you may be able to take this deduction yourself. While many assisted living residents and their family members do meet the requirements for the tax deduction, it is a good idea to consult a tax advisor before filing for any deductions.

Making Decisions for the Future

River Crossing, located in Charlestown, Indiana, provides an assisted living experience that is completely focused on your needs. From the moment you arrive, we get to know you, your history, your interests and your concerns and use that to create an assisted living service plan specifically for you. This plan helps to guide your daily activities, outline the level of assistance needed to keep you safe and supported and identify opportunities for you to connect with new friends and neighbors. At River Crossing, each day and each choice is about you, your happiness and your health.

Interested in learning more about the River Crossing community? We would love to answer your questions! Contact us today!