Costs can be a significant concern when searching for an assisted living facility for a loved one. Most families have a limited budget to pay for care and other expenses. This reality leads many to wonder if there is any form of tax relief for assisted living. Are the costs of assisted living tax deductible? This post will cover whether the costs of assisted living are tax deductible.
As always, this shouldn’t replace professional advice. Seeking guidance from a tax professional or financial advisor with elder care and tax planning expertise is advisable.
Are Costs for Assisted Living Tax Deductible?
Assisted Living Expenses
Assisted living facilities offer various services, including meals, personal care, and 24-hour assistance. The costs for these services can get high. As a result, many families explore ways to reduce costs or save money. Tax deductions or credits could be one way to find financial relief.
Tax Deductions for Assisted Living Costs
The IRS offers potential tax deductions for some medical expenses. Assisted living costs can be eligible under the right conditions. The IRS requires the individual’s medical expenses to exceed a percentage of their adjusted gross income (AGI) to qualify. At the time of writing, the threshold is 7.5% of AGI.
However, not all assisted living expenses qualify. The expenses must be part of medical treatment or care. It is also important to note that tax laws can change.
Qualifying Costs
Costs directly contributing to medical treatment or care usually qualify for the deduction. Personal care costs may also qualify if the person needs assistance due to age or illness.
Food and meals might also qualify under the right circumstances. It could count as a deductible medical expense if doctors recommend a special diet for medical purposes.
You may also have various facility fees or special care services that qualify. If the facility charges for some type of medical care or program, you can include it as a medical deduction.
However, it is important to remember that the total costs must meet the eligibility requirements. To meet the threshold, you can also add assisted living costs with other medical expenses. That includes dental care and other healthcare services received outside the facility.
Tax Credits for Assisted Living
In addition to deductions, individuals may also be eligible for an assisted living tax credit. While tax deductions reduce taxable income, tax credits directly reduce the tax owed. Currently, there is no federal tax credit for assisted living expenses. However, some states offer tax credits or deductions for senior care expenses. Consult a tax expert in your state to find out if a tax credit is available for assisted living.
Spring House Senior Living
At Spring House, we understand that finding the right senior living community can be challenging. That’s why we offer a variety of amenities and services to cater to different needs and preferences.
Schedule a tour of one of our communities in Cartersville, Lithia Springs, or Louisville today. You’ll see why Spring House is the ideal choice for senior living.
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