Thoughts from others - tax question (nursing home expenses)

[soccerdad72]

Not expecting tax expert opinions, more just wondering how people would translate this and whether or not my parent's situation applies.

Long story short - my father had a fall months ago and was sent to a nursing facility for rehab. In recent months, however, it's been determined that he should remain in nursing care, partially because of physical ailments, but a lot of it because he's been diagnosed for dementia. They generally help him get dressed and bathed as well as assist him into and out of bed.

While doing my parents' taxes, I was trying to decide how to handle the past few months (3 months or so) of nursing costs as to whether they would qualify as medical expenses for itemized deduction purposes. I am already claiming the first few months, since they were actively providing rehab services and other medical care.

The official IRS page says this:

• If you, your spouse, or your dependent is in a nursing home primarily for medical care, then the nursing home cost not compensated for by insurance or otherwise (including meals and lodging) is deductible as a medical expense.
• If that individual is in a home primarily for non-medical reasons, then only the cost of the actual medical care not compensated for by insurance or otherwise is deductible as a medical expense, not the cost of the meals and lodging.

https://www.irs.gov/faqs/itemized-d...es/medical-nursing-home-special-care-expenses

Google AI mentioned this:

• Primary Purpose is Medical: If the resident is in a home due to a chronic illness (unable to perform 2+ daily living activities) or requires 24/7 skilled nursing care, all costs, including room and board, are deductible.

Thoughts? How would you translate the IRS wording in my father's case?

 

[barkley]

irs publication 502 goes into this and from the way I read it (I administered Medicaid programs and the wording is similar) so long as your dad has a care plan from his doctor you should be able to (he meets the chronically Ill criteria b/c of the nature of the help he needs/he also probably meets it under the safety elements b/c of the dementia diagnosis).

 

[Dan Murphy]

a nursing home primarily for medical care

a home primarily for non-medical reasons


From your OP.....Is dad in for medical (inability to perform 2 or more ADL's) or non-medical reasons (senior living)?

 

[soccerdad72]

a nursing home primarily for medical care

a home primarily for non-medical reasons


From your OP.....Is dad in for medical (inability to perform 2 or more ADL's) or non-medical reasons (senior living)?

A nursing home primarily for medical reasons. And yes, they’re performing multiple task for him and some other medical functions as of late.

 

[Genie+]

https://www.elderlawanswers.com/tax-deductions-for-assisted-living-costs-7184

In order for assisted living expenses to be tax deductible, the resident must:

• Be considered chronically ill. This means a doctor or nurse has certified that the resident either:
  • cannot perform at least two activities of daily living (ADLs), such as eating, toileting, transferring, bath, dressing, or continence; or
  • requires supervision due to a cognitive impairment (such as Alzheimer’s disease or another form of dementia).

__________________
And AI put it like this:

Food and lodging in an assisted living facility are
generally tax-deductible if the resident is considered "chronically ill" (needs help with 2+ daily living activities or requires substantial supervision due to cognitive impairment like dementia) and is in the facility primarily for medical care, as outlined in IRS Publication 502.
IRS (.gov) +2
Key Takeaways for Tax Deduction:

• Medical Necessity: If the primary reason for being in the facility is to receive qualified medical/nursing care, the entire cost—including room and board—is generally deductible.
• Chronic Illness Requirement: The resident must be certified as chronically ill by a health care provider.
• Memory Care: Memory care residents often qualify because 24/7 supervision is deemed necessary for their safety, making almost all costs, including room and board, deductible.
• Itemizing Expenses: These costs are considered itemized medical deductions, which must exceed 7.5% of the adjusted gross income (AGI) to be deductible.
• Documentation: The facility should provide a breakdown of fees for medical services vs. room and board.
• If not in for medical care: If the facility is merely for custodial care (housing/support), only the specific medical services, not the room and board, are deductible.
  IRS (.gov) +4

Disclaimer: Tax laws are complex. It is highly recommended to consult a tax professional or financial advisor to determine eligibility based on specific circumstances.

 

[tvguy]

• Itemizing Expenses: These costs are considered itemized medical deductions, which must exceed 7.5% of the adjusted gross income (AGI) to be deductible.

This could be an important test.

 

[disykat]

My parents were never in a "nursing home" or "rehab" but did live in assisted living then memory care. In assisted living, I had to separate out "rent" from "care points" for taxes and the facility marked that clearly on their monthly statements. Rent wasn't deductible, care points were. The minute they transferred to memory care 100% of the cost was considered medical. I would assume if he's in a nursing home for dementia, it means he can no longer live on his own, requires help with his ADL's, and it is medical care.

We even had a situation due to the pandemic where we moved mom in early with dad to memory care because they got stuck in separate buildings when lock down occurred. After we had to move Dad, she was still managing okay in assisted living in the next building over, but we moved her so they could be together in lock down. (She wasn't allowed to visit once lock down occurred because it was a separate building!) The staff suggested it because they were both really struggling with being separated. (You can imagine!) Because she had a dementia diagnosis, 100% of memory care was considered deductible even though she didn't yet need ALL of the services. She met the criteria to enter that care, so it was considered 100% medical.

With two parents in full memory care, I certainly didn't have to worry about it being enough to exceed 7.5% of their AGI!

 

[Dan Murphy]

While doing my parents' taxes

Itemizing Expenses: These costs are considered itemized medical deductions, which must exceed 7.5% of the adjusted gross income (AGI) to be deductible.

The amounts above 7.5% of AGI are deductible. If doing the taxes yourself, using TurboTax or similar prigram, the program will do the proper calculations. Just answer the flow of questions. If an accountant or similar is doing the return, they will do the same.

 

[tvguy]

With two parents in full memory care, I certainly didn't have to worry about it being enough to exceed 7.5% of their AGI!

My mom didn't have enough taxable income to even file income taxes.

 

[soccerdad72]

Just to be clear - I understand how to do the taxes, I was just curious what others thought about my father’s care and if it would meet the criteria for deductibility.

The difference between four months and eight months of nursing care meant the difference between being able to itemize or taking the standard deduction.

 

[barkley]

Just to be clear - I understand how to do the taxes, I was just curious what others thought about my father’s care and if it would meet the criteria for deductibility.

The difference between four months and eight months of nursing care meant the difference between being able to itemize or taking the standard deduction.

my opinion-if a medical provider has certified it, i'm going to say 'yes' b/c you stated-

They generally help him get dressed and bathed as well as assist him into and out of bed.

that's at least 3 of the minimum criteria of 2 ADL's he requires assistance with (and given those he probably technically meets several more.


best of luck on proceeding with their taxes-don't forget the new additional $6k each deduction seniors 65+ are eligible to (and can take even if they itemize). every little bit helps!