Can you deduct a parent's assisted living costs?

Paying for a parent’s care

Assisted living can run thousands of dollars a month, and many families end up paying part of the bill for a parent. A natural question follows: can any of it come off your tax return?

When a parent’s medical bills count for you

The IRS lets you count medical bills you pay for a parent if you cover more than half of their support. Your parent does not have to live with you for this to apply.

When assisted living counts as medical care

Assisted living counts as medical care when a doctor certifies that your parent needs help with daily tasks, like bathing and dressing, or needs supervision because of dementia.

When that is the case, a large portion of the bill, or even all of it, can count. If care is not the main reason your parent is there, only the part of the bill for care may count, and many facilities can tell you how their charges break down.

The two limits to plan around

• The 7.5% floor: only the medical costs above 7.5% of your income count.
• Itemizing: you have to itemize deductions on your tax return. If you take the standard deduction, these costs do not help.

So yes, you can often deduct a parent’s assisted living, as long as you meet these conditions. Keeping the doctor’s certification and the facility’s statements together makes the numbers much easier to support.

How we handle it

At Sansone CPA & Financial, we coordinate your tax, investment, and retirement decisions so a parent’s care costs are planned into your tax return before year end, not discovered after it. That is part of our tax preparation and tax planning in Crystal Lake, IL.