Medical Expenses Deductions in Retirement Homes
Medical Expenses Deductions in Retirement Homes
Many families must face the financial burden of placing their family members in Nursing homes to ensure that their loved ones receive the best care they can receive. The good news is that some nursing home expenses can be tax-deductible depending on circumstances. Understanding IRS tax rules can help alleviate some financial pressure.
When Nursing Home Costs Are Fully Deductible
If you, your spouse, or dependent lives in a nursing home primarily for medical care, the IRS allows you to deduct the cost of the nursing home expense as a medical expense.
The expenses deductibles include:
- Medical Care
- Meals
- Lodging
If these expenses are not reimbursed by insurance or other sources, they can be deducted as medical expenses.
When Nursing Home Costs Are Partly Deductible
If the Individual who lives in the nursing home for “non-medical reasons”, such as personal care, only the portion of the cost related to medical care is tax-deductible.
In these situations, medical services may be deducted if not reimbursed, but meals and lodging will not be deductible.
Determining Dependency Status
To determine if your parent qualifies as a dependent for these purposes, refer to the section “Whose Medical Expenses Can You Include” and “Nursing Home” in Publication 502, Publication 502, Medical and Dental Expenses.
How To Deduct Medical Expenses
To deduct qualified medical expenses, including eligible nursing home costs, claim them on Schedule A (Form 1040), as Itemized Deductions.
If you would like to learn more about nursing home deductions or other medical deductions and to set up a consultation, call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730.
The above information is of a general nature only and should not be relied upon for specific situations.
