Client in nursing home. Trying to decide if the cost of staying there is deductable on Sch A as medical expense. Total for the year was around $49,000. Thanks for any help anyone can give me on this.
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Check Pub 502 or TTB page 4-7. -
Yes,
If paid by patient and no reimbursment from insurance or other 3rd partyComment
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You need to get copies of the monthly bills to determine if there are ineligible personal expenses on them that cannot be deducted. Usually the monthly flat rate fee for the room is sufficient to eliminate taxable income for many. If not, you need more detail.Comment
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The first thing you need to determine is if the person fits the definition of "chronically ill". If so, then all expenses related to care are deductible ( except for personal care expenses, such as hairstyling,etc)."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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John is correct. Sometimes people use the term nursing home to refer to assisted living facilities, and expenses may or may not be deductible based on IRC requirements. If it is true nursing care, the base expenses are usually deductible.Comment
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Over-simplified answer
As JohnH mentioned, you will need to determine the actual physical issues related to the resident. (The details are readily available, and relate to such things as mobility, toileting, dressing, eating, etc.)
If a person meets the criteria, virtually all of the (unreimbursed) expenses turn into a qualifying medical deduction.
OTOH, if the person is merely in a "retirement home" (as opposed to an "assisted living" facility) the rules are completely different. Some or none of such expenses may qualify.
FEComment
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Thank you all so much, the person actually is in assisted living but is blind and has dementia so I feel those two criteria would qualify that they need assistance with most daily living activities.Comment
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A verified diagnosis of dementia will do it. (i'm not so sure blindness alone will qualify - probably not)
Ideally you need a statement signed by a licensed medical provider that addresses the need for assistance with ADL's. It needs to be updated annually. I've found that the doctor who sees patients in the nursing home ( if there is one) is usually willing to sign if the statement is precise."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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The term I've heard used by nursing homes is the "level of care" premium or payment. For persons unable to function on their own requiring help for basic daily needs most expense should be deductible.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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Other Option
If the person does not qualify for a 100% medical deduction, most assisted living facilities will give yuo a % of the cost that is deductible as medical.Comment
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That is true. I had a client in such a facility and every year they gave a letter to every resident there as to the percentage of monthly charge eligible to be claimed as a medical expense.Comment
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Independent Living
OK. What about a terminally ill 90-year old living in an Independent Living apartment under Hospice Care (which is an unusual situation)? She does require almost the same level of care as those in Assisted Living which is provided by Hospice. I doubt the monthly apartment fees (which include one meal) are deductible in this situation since Hospice is providing some of the services Assisted Living might provide.Comment
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