16 Feb Can I deduct assisted living costs?

Q. I read your column that nursing home expenses are tax deductible past the 7.5 percent threshold. What about assisted living expenses that consist of one component for room and board, including some basic care, and a second charge for more intensive care by nurses and other caregivers? Are some of these tax deductible?
— Planning

A. It depends.

In certain instances, these expenses are allowable as medical expenses, said Matthew DeFelice, a certified financial planner with U.S. Financial Services in Fairfield.

If you or someone who was your spouse or your dependent — either when the service was provided or when you paid for the services — is in a nursing home primarily for medical care, then the entire cost including meals and lodging is deductible as a medical expense, DeFelice said.

But if the individual is in the home mainly for personal reasons, then only the cost of the actual medical care is deductible as a medical expense, not the cost of the meals and lodging, he said.

DeFelice said you can include in medical expenses the wages and other amounts you pay for nursing services.

“The services don’t actually have to be performed by a nurse as long as the services are of a kind generally performed by a nurse,” he said. “This includes services connected with caring for the patient’s condition, such as giving medication or changing dressings, as well as assisting with activities of daily living such as bathing and grooming.”

The services can be provided in your home or another care facility.

Generally, he said, only the amount spent for nursing services is a medical expense.

“If the attendant also provides personal and household services like grocery shopping or house cleaning, amounts paid to the attendant must be divided between the amount of time spent performing household and personal services and the time spent for nursing services,” he said.

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This post was first published in February 2018.