Assisted Living Costs Tax Deductible

by Sholem Berkowitz

Posted on 2018-02-02

Although the costs of assisted living vary from state to state in the USA, it is for your information that assisted living costs tax deductible is allowed to a certain extent and on certain types of costs. Here is a guideline that can help you become well informed about how much of the cost of assisted living is allowed as a tax deduction.


Assisted Living Costs



  1. If the cost of assisted living exceeds 10% of the adjusted gross income in case of a long term medical care, such cost is tax deductible. For seniors aged above 65 years, the limit of tax deduction is 7.5%. In that case, the person under long term medical care should be certified as critically ill by a qualified doctor.
  2. The resident has to be under round the clock supervision due to an impairment which is cognitive in nature.
  3. The resident has to be certified to be unable to perform at least two daily activities that include washing, bathing, toileting and other daily activities.
  4. The resident has to receive specific services on a daily basis and which are specified under the “Wellness Care Plan” that is drafted by a qualified doctor, trained and skilled nurse or a social worker.
  5. According to the “Health Insurance Portability and Accountability Act, 1996, only certain services which are daily in nature have been certified as those for which tax deduction is allowed for an occupant of an assisted living facility. These services include household cleaning, eating, bathing, continence, dressing and transferring.
  6. In some cases the entire cost of assisted living is tax deductible.
  7. In order to get tax deductions, the claimant must itemize the costs of medical care.

Here is a list of itemized expenses about Assisted Living Costs:


1. Medical fees from health care providers, hospitals, laboratories and doctors.

  • Expenses on prescription drugs.
  • Items for personal care such as disposable briefs and daily food.
  • Cost of transportation for receiving medical care.
  • Cost of home modification such as hand rails and grab bars.
  • Other costs that pertain to daily services as specified.

To be properly informed about assisted living costs tax deductible, you will need to carry out a search on the internet. This will help you to make a self assessment of how much of the costs of assisted living is eligible under the tax deduction. This will also help you to prepare a monthly budget.

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