The cost for senior living in an assisted living facility …. can be quite expensive! Are you up to speed on knowing about writing off these expenses when you file your tax return if you are paying for Mom or Dad to live in an assisted living setting? It will save you $$$ to know that a portion of these expenses may be tax deductible? Particularly if the medical expenses, including long-term care expenses add up to more than 7.5 % of your adjusted gross income?
I like to bring to the attention of our seniors and their families that assisted living services can be filed as a tax-deductible medical expense by the individual who pays for the senior’s care. The board and care costs for assisted living may be deducted as medical expenses if your senior lives in the facility due to medical reasons.
A high level of assistance, even if just standby assistance with at least two Activities of Daily Living or “ADLs” for a minimum of 90 days… is typically the defining care needed to qualify. ADLs include eating, toileting, bathing, dressing, transferring and incontinence care. Tax deductions in senior living also apply to someone with cognitive impairment due to Dementia, Alzheimer’s, or other cognitive diagnosis that requires a high level of supervision. In order to qualify, care services must be provided according to a care plan handled by a licensed health care provider, physician, nurse, or social worker.
Adult children may also get a tax deduction if their parents or other close family members live in an assisted living place and qualify as their dependents. The senior must be a U.S. citizen or legal resident or resident of Canada or Mexico. The adult child must provide more than half of the family member’s financial support for the year. Even if the adult child is not paying more than half the family member’s total support for the year, the child may still be eligible for a deduction. The adult child must pay more than 10 percent of their senior’s total support for the year. Others who also support the resident, when combined are to contribute more than half of the resident’s support. All supporters of the senior must agree on and sign a Multiple Support Declaration.
If you are considering living in a senior living residence, then keep in mind there are tax savings. The senior living places cannot provide you tax advice. We suggest you consult with your tax expert, accountant, or the IRS regarding your questions concerning tax deductions.
by Lori Solomon
