According to Internal Revenue Service (IRS) Publication 502, nursing home expenses are tax deductible if the stay is primarily for medical care. To receive this deduction, your nursing home medical expenses must exceed 7.5% of your adjusted gross income (AGI). How much you’re able to deduct from your taxes depends on the reason for your care.
If you are in a nursing facility mainly for medical care, the entire cost is deductible as a medical expense on your taxes. If your nursing facility stay is for personal or non-medical reasons, only the costs of actual medical care are deductible.
The Texas Medicaid payment for nursing homes lawyers at Marc Whitehead & Associates can provide insights into what the IRS says about nursing home services being tax deductible. We can help you make informed decisions regarding Medicaid planning, financial planning, making an estate plan, elder law, and more.
Can You Write Off Nursing Home Costs on Your Taxes?
The IRS says that you can write off certain nursing home expenses on your taxes. At Marc Whitehead & Associates, our Texas Medicaid eligibility and asset protection lawyers can give you insights into the scenarios in which the IRS allows your costs to be tax deductible, such as:
Primary Medical Care
The IRS lets you deduct the full cost of your stay, including your meals and lodging, as long as medical necessity is your main reason for staying in a nursing home.
This means you can deduct the costs of:
- Assistance with activities of daily living
- Memory care services
- Any surgeries you require
- Prescription medications
- Medication management services
- Physical therapy
- Occupational therapy
- Oxygen-related equipment
- Wheelchairs
- Other medical equipment and supplies
- Room and board
- Services you receive for Alzheimer’s disease, dementia, or other conditions that affect your health
Non-Medical or Custodial Care
If you are staying in a nursing home because you need help with daily tasks, the actual cost of your medical care is deductible. However, you cannot deduct your expenses for meals and lodging.
Dependent Rules
In some situations, you can deduct expenses if you pay for a spouse or family member staying in a nursing home if they qualify as your dependent or fit under a multiple support agreement.
Our lawyers can discuss everything the IRS has to say about these tax-deductible nursing home expenses with you. Along with this, we can answer any questions about how to protect your home if you need Medicaid for nursing home care and other topics specific to your circumstances.
For a free legal consultation, call (800) 562-9830
What Are the IRS Requirements for Nursing Home Expenses to Be Tax Deductible?
There are IRS rules in place regarding medical, nursing home, and special care expenses. Marc Whitehead & Associates provides you with access to attorneys who can describe these rules. Below are details about the core rules for deductibility:
- Medical reason: Your costs are deductible if the main reason you’re in a facility is medical.
- Non–medical or custodial reason: If your stay is primarily for personal or custodial reasons rather than medical care, only your qualified medical expenses are deductible.
- 7.5% AGI threshold: You can deduct the portion of your total qualified medical expenses that is more than 7.5% of your AGI.
- Itemized deduction requirement: You must submit Schedule A (Form 1040) and itemize your tax deductions to claim the medical costs.
- Dependency rules: If you’re paying for a family member, they typically must qualify as a dependent or meet multiple support agreement rules.
Our lawyers are familiar with how the IRS treats nursing home expenses and the tax rules that apply to them. We want to help you or a family member receive care in a nursing facility and maximize your tax savings.
What Does the IRS Say About Long Term Care Insurance?
Generally, the IRS views qualified Long Term Care Insurance (LTCI) as a medical expense. As such, you are allowed to deduct eligible annual premiums of long-term care insurance policies up to specific age-based limits.
The maximum deductible amount for LTCI is based on your age at the end of the tax year. To claim LTCI premiums on your taxes, you will have to itemize your deductions on Schedule A. Your total medical costs must exceed 7.5% of your AGI, and you can only deduct the lesser of your actual paid qualified premium or the IRS limit for your age.
Marc Whitehead & Associates has spent years helping our clients navigate the complex systems around disability and elder care. We encourage you to stay informed and empowered about how the IRS treats qualified long-term care expenses and nursing home costs that are tax deductible.
The Bottom Line on What the IRS Says About the Tax Deductibility of Nursing Home Costs
If you or a family member are considering long-term care, now is the time to learn about what the IRS is saying about nursing home costs, tax breaks, and refunds. Talk with the team at Marc Whitehead & Associates, and we can provide you with personalized legal guidance and support.
Our law firm has 120 years of combined experience. We strive to use what we know to help our clients and their families weigh the pros and cons of various decisions regarding assisted living facility support and other forms of long-term care.
We are available to review your situation and provide you with information about what the IRS has to say about deducting nursing home costs from your taxes and other topics. Reach out to us today.
Call or text (800) 562-9830 or complete a Free Case Evaluation form