Tax season can be stressful, but for seniors and their families, it’s also an opportunity to ease the financial burden of assisted living. Many people don’t realize that certain assisted living expenses may be tax-deductible, potentially saving families thousands of dollars. Here’s what you need to know as you prepare for tax season.

1. Can Assisted Living Costs Be Deducted?

The IRS allows deductions for qualified medical expenses that exceed 7.5% of adjusted gross income (AGI). If a senior’s assisted living costs are primarily for medical care, some or all of these expenses may qualify.

What Qualifies as a Medical Expense?

✔️ Costs for medical services (nursing care, physical therapy, etc.)
✔️ Personal care services for individuals who are chronically ill and require help with daily activities (e.g., eating, bathing, dressing)
✔️ Memory care services for individuals with Alzheimer’s or dementia
✔️ Certain room and board costs if the resident requires medical care as their primary need

2. Who Can Claim the Deduction?

• The senior themselves if they itemize deductions and meet the 7.5% AGI threshold.
• A family member if they pay more than 50% of the senior’s support and claim them as a dependent.

3. Tax Credits & Benefits Seniors Should Know

🟢 The Child and Dependent Care Credit – If a family member is paying for care so they can work, they may qualify for this tax credit.
🟢 Medical Expense Deductions for Home Modifications – Certain home modifications, like wheelchair ramps or grab bars, may be tax-deductible.
🟢 Long-Term Care Insurance Premium Deductions – If a senior has a qualifying long-term care insurance policy, part of the premiums may be deductible.

4. What Families Should Do Now

✅ Keep detailed records – Save receipts, invoices, and statements from assisted living facilities.
✅ Request an itemized statement – Ask the assisted living community to break down medical vs. non-medical costs.
✅ Consult a tax professional – A CPA can help determine eligibility for deductions and credits.

5. Thinking About Assisted Living? Tax Savings Can Help

If you’re considering assisted living for yourself or a loved one, knowing these potential tax benefits can help offset the costs. Planning ahead and leveraging deductions can make senior care more affordable than many families expect.

💡 Need help navigating assisted living options? We’re here to guide you through the process and find the best solution for your loved one. Contact us today!

Jennifer Carter
Founder, Star Light Senior Advisors
(617) 270-0402