.png&w=256&q=75){kind=small}
Are Nursing Homes Tax Deductible?
Date Updated: December 23, 2024
Written by:
Lauren is an experienced copywriter with a passion for crafting impactful narratives in the senior care industry. Her work covers essential topics such as assisted living and dementia care, providing valuable insights to readers. Collaborating with leading senior care provider websites such as Caring.com, PayingforSeniorCare.com, and AssistedLiving.org has deepened her appreciation for senior living and elder healthcare. Lauren’s goal is to empower seniors and their families with the knowledge needed for informed long-term care decisions.
Reviewed by:
Rachel is a skilled finance manager with a Master of Accounting and a Bachelor of Arts in English. With 10 years of experience in finance, she specializes in business, finance, law, real estate, and marketing. Rachel has worked in personal financial planning, wealth management, and tax accounting, serving senior clients, and has spent nine years in corporate financial planning and analysis. Currently, she manages finances for a Fortune 500 company in New York City.
Yes, nursing homes are tax-deductible, depending on your circumstances. The IRS allows deductions for nursing home costs if the primary purpose of the stay is to receive medical care. These deductions help alleviate some financial burdens on families managing long-term care costs.
What Nursing Home Expenses Are Tax Deductible?
Nursing home costs can prove a significant financial burden for seniors and their families. Tax deductions can lessen this burden and ensure aging individuals can afford the care they need. Generally, seniors, their spouses, and dependents can deduct medical expenses if they exceed 7.5% of your adjusted gross income (AGI).
The IRS stipulates that nursing home costs must primarily constitute medical care to qualify for a tax deduction. Therefore, expenses may qualify for the deduction if an individual's stay is primarily for medical reasons, such as managing a chronic condition or receiving physician-prescribed treatments.
Eligible expenses include:
- Nursing services
- Doctor visits
- Physical, speech, and occupational therapies
- Assistance with daily activities due to medical necessity
- Medications
- Medical equipment and supplies
- Medically necessary treatments
What Nursing Home Expenses Are Not Covered?
Nonmedical services, such as room and board or personal care, don't qualify for tax deductions if a resident stays in the nursing home for personal care or companionship only.
Ineligible expenses include:
- Personal living costs (e.g., room and board)
- Laundry services
- Personal items (e.g., toiletries, clothing)
- Fees for recreational activities and entertainment
- Housekeeping
- Meal preparation
- Cost of private rooms when not medically necessary
If a patient resides in the facility primarily for medical care, the cost of room and board may qualify for deductions.
Claiming Nursing Home Tax Deductions
Claiming nursing home deductions can help reduce the financial burden of long-term care. To maximize your tax benefits, keep detailed records of all expenses related to the nursing home's medical care, including invoices and receipts for medical services, therapies, and medications. When filing your taxes, itemize these expenses on Schedule A of Form 1040 to claim the deduction.
Consulting with a tax professional can help simplify this process, as they can provide guidance tailored to your specific situation and ensure you're taking advantage of available deductions. You may also consult your local Area Agency on Aging for a referral to a specialized senior tax benefits counselor who can assist you.