Internal Revenue Code Section 213 (a) provides an itemized deduction for unreimbursed medical expenses to the extent that such expenses exceed 7.5% of adjusted gross income. Treasury Department Regulations under this Section state that the extent to which expenses for care in a facility other than a hospital are deductible depends on the condition of the individual and the nature of the services received. It does not depend on the nature of the facility.
The entire cost of medical care and meals and lodging at a facility is deductible when a principal reason that an individual is in a facility is for medical care. If the individual satisfies one of the following conditions then he or she is considered to be at the facility for medical reasons:
- He or she is unable to perform, without substantial assistance, at least two out of six daily living activities (eating, toileting, transferring, bathing, dressing, continence) for a period of at least 90 days due to a loss of functional capacity.
- He or she requires substantial supervision to protect him or herself from threats to health and safety due to severe cognitive impairment.
If the individual’s condition is such that the availability of medical care in a facility is not a principal reason for his or her presence there, meals and lodging at the facility are not deductible. Only the cost attributable to medical care qualifies as deductible medical expense.
If a family member pays for all or a portion of the cost of the facility, he or she may be able to take the medical deduction if the resident of the facility qualifies as the payer’s dependent.
Please contact your tax advisors for specific guidance in regard to your personal circumstances.
At Woodcrest Village, we seek to provide all of our residents with dignity, respect, and the senior care services needed for a healthy, full life while in an assisted living setting.