Federal Deductions for Assisted Living Care
It is possible for a person to receive deductions on their Federal income tax returns when they are either in an assisted living care situation or paying for another who is in it.
As the population has been steadily aging and the life span increasing, assisted living care has become more common. It is possible to deduct the cost of assisted care living depending on the type of services you receive and the nature of your disability. The IRS has certain guidelines to determine your eligibility.
It is possible to deduct the cost of housing and meals when a person is in an extended care facility due to aging or the inability to care for themselves. Certain personal care services may also be deductible as well. The determining factor is generally the inability to perform at least two basic functions of living without assistance. These basic living functions include such activities as eating, toileting, moving from place to place, dressing, and bathing. A doctor must certify in writing that the patient has been unable to perform these activities for at least 90 days.
If you are paying for a patient to be in an assisted living care facility for the above reasons, you may take the deduction from your return. The patient must qualify by the above criteria and in addition must be related to the payer or have lived as a member of their household for an entire year. A parent must also be a citizen of the United States or a resident. They may also be a citizen of either Mexico or Canada, and the child must have paid over 50% of their support for the year.
The deduction can be taken in the case of certain cognitive diseases such as Alzheimer’s disease. Although many of these patients may not qualify under the “inability to perform to basic life activities” rule, they do require a substantial amount of care and guidance in order to insure their safety.
As the “baby boomer” generation continues to age, the need for assisted living care will continue to increase. The tax deductions for this care help to offset the cost and the financial burden on both the patients and those people who are responsible for their care. Many people are also taking out assisted care insurance policies to cover the potential costs. At the present time, the premiums for these insurance policies are not deductible, but already some States have been examining the idea of allowing them as a deduction on State income tax. Montana has already begun to allow certain types of insurance premiums. Hopefully, this idea will catch on at the Federal level.