Assisted Living: Is It a Deductible Medical Expense?

Assisted living is a type of housing designed for people who need some help with activities of daily living. This can include help with things like bathing, dressing, eating, using the restroom, and taking medications.

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Assisted Living: An Introduction

Assisted living is a type of housing designed for older adults who need help with some activities of daily living, such as bathing, dressing, and eating. Assisted living also offers social and recreational activities. Most assisted living residents live in their own apartments or individual rooms, but some communities offer shared accommodations.

Assisted living is not a new concept. In fact, the first modern assisted living facility opened in the United States in 1963. Today, there are more than 33,000 assisted living communities nationwide that provide housing and care to nearly 1.5 million older adults.

The cost of assisted living can vary widely depending on the location, size of the apartment or room, and the type and level of care needed. But in general, assisted living costs more than senior apartments or homes that don’t provide personal care or support services.

So, is assisted living a deductible medical expense? The answer is maybe. If you or your spouse/partner reside in an assisted living community and meet certain requirements, you may be able to deduct some of your expenses as medical expenses on your federal income tax return. To learn more about this deduction and whether you qualify, please consult a tax advisor or visit the Internal Revenue Service website at www.irs.gov.

What is Assisted Living?

Assisted living is a type of housing designed for seniors who need some help with activities of daily living, such as bathing, dressing, eating, or using the restroom. Assisted living residents usually have their own private apartments or rooms but share common areas with other residents. Some assisted living communities also offer skilled nursing care and other services on-site.

The Benefits of Assisted Living

There are many benefits of assisted living, especially for seniors who wish to maintain their independence and quality of life. Assisted living can provide a safe and comfortable environment, with access to necessary medical care and support services. It can also help to reduce the financial burden on families who might otherwise have to provide care themselves. In some cases, assisted living may even be tax deductible.

When considering whether or not to move to an assisted living facility, it is important to weigh all of the potential benefits and costs. Assisted living is not for everyone, but for those who need it, it can be a valuable resource.

The Cost of Assisted Living

seniors. Whether it’s because of failing health, age-related cognitive decline or simply the desire to downsize and simplify their lives, more and more seniors are making the decision to move into assisted living communities.

But what exactly is assisted living, and is it a deductible medical expense?

Assisted living is a type of senior housing that provides personal care and support services to residents. Services can vary from community to community, but typically include help with activities of daily living such as dressing, bathing, eating and toileting. Most assisted living communities also provide light housekeeping, transportation and 24-hour security.

In order to be considered a medical expense, the costs of assisted living must be for care that is “required by reason of illness or injury.” Unfortunately, this generally means that the costs of assisted living are not deductible as medical expenses.

However, there are some circumstances under which the costs of assisted living may be considered a deductible medical expense. For example, if a doctor prescribesassisted living as part of a treatment plan for an illness or injury, the costs may be deductible. Or if a doctor believes that assisted living is necessary to prevent further deterioration of a patient’s health, the costs may also be deductible.

If you’re considering moving into an assisted living community and you’re wondering whether your costs will be tax-deductible, we recommend speaking with a tax advisor or financial planner. They can help you understand your specific situation and determine whether the costs might be eligible for deduction as a medical expense.

Is Assisted Living a Deductible Medical Expense?

Medical expenses for assisted living may be deductible if they are considered necessary for the care of a qualifying individual. In order to qualify, the individual must:

-Be unable to perform at least two basic activities of daily living (ADLs) without assistance, OR
-Have severe cognitive impairment AND require substantial supervision to protect themselves from threats to their health and safety.

To deduct assisted living expenses, they must also be considered medically necessary and recommended by a licensed healthcare professional. Additionally, the costs must not be covered by insurance or other sources. Finally, the expenses must be paid out of pocket (not reimbursed).

How to Deduct Assisted Living Expenses

There are a few different ways that you may be able to deduct your assisted living expenses on your taxes. Here are a few things to keep in mind:

1. In order to deduct your assisted living expenses, you must itemize your deductions.

2. You can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). So, if your AGI is $50,000, you can only deduct medical expenses that exceed $3,750.

3. Assisted living expenses may be deductible as medical expenses if they are considered necessary for the treatment of a medical condition. For example, if you require help with activities of daily living such as bathing, dressing, and eating due to a physical or mental disability, your assisted living expenses may be considered deductible medical expenses.

4. If you have long-term care insurance, you may be able to use the proceeds from the policy to pay for assisted living expenses that are considered medically necessary. You can then deduct the amount of premiums you paid for the policy on your taxes (up to certain limits).

5. You may also be able to deduct certain moving expenses related to assisted living if you are moving due to a change in medical condition. For example, if you are moving from an independent living facility to an assisted living facility or nursing home due to a deterioration in health, you may be able to deduct certain moving expenses such as transportation and storage costs.

The Bottom Line

The bottom line is that, while assisted living may be a deductible medical expense, it is important to speak with a tax professional to determine if your particular situation qualifies.

FAQs

Many people are unsure whether assisted living costs are considered a deductible medical expense. The answer depends on a few factors, including the type of care you need and your financial situation.

If you need help with activities of daily living, such as bathing, dressing, or using the restroom, you may be able to deduct the cost of assisted living as a medical expense. However, if you only need help with occasional tasks, such as housekeeping or transportation, the cost is not usually considered deductible.

In addition, you can only deduct medical expenses if they exceed a certain percentage of your adjusted gross income. For 2020, that threshold is 7.5%. So, if your AGI is $50,000 and you have $5,000 in medical expenses (including assisted living), you can deduct $2,500 on your taxes.

Of course, everyone’s financial situation is different.Your best bet is to talk to a tax professional to see if you qualify for the deduction.

Glossary

Assisted living is a type of long-term care that provides personal care, help with activities of daily living, and health-related services to people who cannot live independently. People who live in assisted living facilities typically have chronic health conditions or need assistance with activities of daily living, such as bathing and dressing.

The cost of assisted living can be a deductible medical expense if it is for medical care that would be provided by a licensed health care provider. To be considered a medical expense, the assisted living must be recommended by a licensed health care provider as a treatment for a specific medical condition. The cost of meals and lodging at an assisted living facility are not considered medical expenses.

Resources

There are many resources available to help you understand whether assisted living is a deductible medical expense. The Internal Revenue Service (IRS) has a publication called “Publication 502 – Medical and Dental Expenses” that explains what types of expenses are deductible. The National Association of Elder Law Attorneys also has a website with information about deducting medical expenses, including assisted living expenses.

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