Senior woman with a cane sitting on a couch with her caregiver

Is Assisted Living Tax-Deductible?

When it comes to planning for senior living, understanding the financial aspects is just as crucial as finding the right community where you’ll live an engaging and enhanced life. Whether you’re looking for a loved one or you’re planning on making the move to assisted living, you’re likely wondering if you’re eligible for any tax benefits when it comes to assisted living expenses.

If you have the question, “Is assisted living tax-deductible, and what qualifies as deductible expenses?”, we will explain what assisted living is, what expenses are tax-deductible, and who can help you get all the benefits you are eligible to receive.

What Is Assisted Living?

When you move into an assisted living community, Artisan at Hudson will provide a supportive environment where you receive assistance with activities of daily living (ADLs), such as bathing, dressing, medication management, and more. 

Your community will offer a balance of independence and care, ensuring you can enjoy a fulfilling and comfortable lifestyle.

Close-up of a person's hand crunching numbers on a calculator

Assisted Living as a Medical Expense

The IRS allows taxpayers to deduct certain medical expenses, including a portion of assisted living costs. However, there are specific criteria that must be met for these deductions to apply.

Eligibility for Deductions

To be eligible for a tax deduction, the IRS requires that the services provided in the assisted living community must be primarily for medical care. This means that the main reason for residing in an assisted living facility should be to receive necessary medical assistance.

Additionally, a licensed health care professional must determine and document your or your loved one’s need for assistance with ADLs. This evaluation helps establish the medical necessity of residing in an assisted living community.

Itemizing Deductions

If you’re going to benefit from the tax deductions associated with assisted living, you must itemize your deductions on your federal income tax return. This means keeping track of all qualifying medical expenses, including those related to assisted living, and reporting them on Schedule A of your tax return.

Qualifying Expenses

The IRS considers a range of expenses as qualifying medical deductions. These may include:

1. Monthly Fees

The portion of the monthly fees that covers medical care services can be tax-deductible. It is important to factor in the level of assisted care that you need, as this can affect your monthly rate. 

2. Medication Management

Expenses for medication administration or management by health care professionals in the assisted living community may be eligible for deduction.

3. Transportation for Medical Appointments

If the assisted living community provides transportation for medical appointments, those expenses can potentially be deducted.

4. Medical Equipment

Any out-of-pocket expenses for medical supplies like specialized equipment may be deductible.

5. Licensed Care Provider Fees

If additional licensed medical professionals are brought in to provide care, those fees may qualify for deduction.

Consulting a Tax Professional

Navigating tax deductions can be complex, especially when it comes to assisted living expenses. It’s advisable to consult with a qualified tax professional or accountant who is knowledgeable about senior care-related deductions. They can provide personalized advice and help ensure you’re maximizing any potential tax benefits.

State-Specific Regulations

It’s important to note that state regulations regarding tax deductions for assisted living expenses can vary. Some states may offer additional deductions or have different criteria for what qualifies as a deductible expense. Consulting a tax advisor familiar with your specific state’s tax laws is crucial for accurate and personalized guidance.

While portions of assisted living costs may be tax-deductible, it’s important to approach this matter with careful consideration and professional guidance. Remember, the primary focus of residing in an assisted living community should be to receive necessary medical care.

Keep meticulous records of all medical expenses, consult a tax professional, and stay informed about both federal and state-specific regulations. With the right approach, you can potentially find some financial relief when it comes to senior living expenses.

Assisted Living at Artisan at Hudson

Artisan at Hudson provides four levels of assisted living care so you can receive the care that promotes your autonomy and quality of life. Our compassionate and hospitable staff is here to support you around-the-clock. You can age in place knowing  you can get the care you need in your community. 

With a number of services and amenities designed to enhance your life, you can age well and enjoy what each day has to offer.

Artisan at Hudson is a monthly rental community, meaning there aren’t hefty entrance fees or intricate contracts. Here, simplicity is key, ensuring  you can focus on what truly matters – enjoying a lifestyle tailored to your preferences.

With this peace of mind, you can get the personalized care and support that will help you flourish. Artisan at Hudson is more than a residence; it’s a community built with your needs and desires in mind, ensuring that every aspect of your daily life is both enriching and meaningful. Call us at (978) 254-7483 to learn more about our community.