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What is Assisted Living?
Are there any tax deductions for assisted living?
Molly Dworken 10/16/2012 05:33PM
Qualifying long-term care services may be tax-deductible as an unreimbursed medical expense on Schedule A of your 1040. The IRS defines qualified long-term care services as those that are “necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services.” However, the individual must meet one of two definitions of a chronically ill person: (1) is unable to perform at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) without substantial assistance from another individual for at least 90 days due to a loss of functional capacity, or (2) requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
Long-term care services and other unreimbursed medical expenses must exceed 7.5 percent of the taxpayer's adjusted gross income in order to qualify for a deduction. Qualifying deductions include the personal care services provided to assisted living residents, including the activities of daily living as listed above and also services such as meal preparation and household cleaning that the chronically ill person is not able to perform. The services do not have to be performed by a licensed medical professional, but they do have to be part of the plan of care prescribed by a licensed healthcare practitioner. It is also possible that room and board may be tax-deductible if they are determined to be part of the plan of care. Consult with an accountant and tax attorney for details as they apply to your specific circumstances.