Pub502 and Assisted Living Tax Deduction

[SmileyFace]

I found an old thread on this (viewtopic.php?t=364335) but it didn't answer my question and I am finding some conflicting info online so curious if someone can answer this.

Here is the questions:
Given that one is able to claim a tax deduction for Assisted Living that includes NOT just medical expenses but also Room/Board since the person is "Chronically Ill" and the Principal reason they are living at the facility is for medical care - does the $50.00 Lodging limit apply or can the full Lodging/Food cost be reimbursed?

I am trying to figure out if my Dad can deduct the FULL amount he is paying for Assisted Living or just Medical Services + $50/nightly for Lodging.

Information from https://www.irs.gov/pub/irs-pdf/p502.pdf
Under "Nursing Home"

You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care.
Don't include the cost of meals and lodging if the reason for being in the home is personal. You can, however, include in medical expenses the part of the cost that is for medical or nursing care.

I added the underline above - Dad definitely meets this statement. He also meets the statement for "Chronically Ill" under the "Long Term Care Section"
So when I read those sections I feel he can deduct the full cost of the Assisted Living (whether it be "Nursing Home" or "Long Term Care Services" - facility - he meets conditions described there-under for being able to tax deduct Room/Board+Services).
What confuses me, and what I see conflicting info on, is under a section titled "Lodging" it limits Lodging to $50/nightly.
First para under lodging states:

You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal
reason for being there is to receive medical care. See Nursing Home, later.

What I don't know if the statements under Nursing Home supercede the $50 Limit or if the two should be considered together? I have read that one can deduct the FULL amount but not sure if the lodging limit needs to be applied in this case.

[andypanda]

I thought LODGING had to do with deducting your hotel/motel lodging expenses while away from home for a procedure in a hospital. And your traveling companion, etc.

"The amount you include in medical expenses for lodging can't be more than $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included."

----------

When my father was deducting all of his assisted living expenses between early 2007 and his death in late 2011 his decision to deduct everything was based on his limited mobility, limited ability to stand for long (which also interferes with meal prep), etc.
He had 3 screws in one hip joint and two bad knees, started with a walker and progressed to a scooter. The last year or so he paid an aide for an hour in the morning and again in the evening to use a lift to get him up, on the toilet, dressed, and on his scooter. Without the paid aide he would have been moved to the nursing wing.

So every year I dutifully followed his instructions and deducted everything for his assisted living and everything for my mother's Alzhiemer's nursing home care. She was in a coma until she died in 2016 fwiw.

During the last year before my father died I had a client one day whose father brought him in. Turned out the father was an IRS lawyer. While the son worked on his assignment we had some free time. We were chatting and I asked about assisted living deductions and such and if the IRS was very interested in who took the deductions and what documentation was required.
He asked for my parents birth years. I said 1922 and 1924. He rolled his eyes and laughed as he shook his head no. YMMV.

They are looking for people who want the care provided by the assisted living arrangement, but don't really need it and probably could live independently.

[SmileyFace]

I thought LODGING had to do with deducting your hotel/motel lodging expenses while away from home for a procedure in a hospital. And your traveling companion, etc.

"The amount you include in medical expenses for lodging can't be more than $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included."

Thanks. This was my initial read as well (that the Lodging $50 limit didn't apply to someone chronically ill and in full time care) but it wasn't clear - at least not to me - if it applies throughout.
We sold his house and are drawing down from the house sale to pay for this (his pension + SS covers only about 1/3) and are counting the years/months before money runs out. The extra deduction buys like an extra month in the grand scheme of things but every bit counts.

[SmileyFace]

During the last year before my father died I had a client one day whose father brought him in. Turned out the father was an IRS lawyer. While the son worked on his assignment we had some free time. We were chatting and I asked about assisted living deductions and such and if the IRS was very interested in who took the deductions and what documentation was required.
He asked for my parents birth years. I said 1922 and 1924. He rolled his eyes and laughed as he shook his head no. YMMV.

They are looking for people who want the care provided by the assisted living arrangement, but don't really need it and probably could live independently.

And thanks for this story. I was thinking similarly - I can't imagine they would question/audit him at his age but who knows.
If they do - they can meet him at assisted living - one look at him will verify he needs to be there. But if that isn't enough the Care Plan signed by the RN with a list of things he needs help with should suffice.

[DSinMW]

I have a similar question as I look at my mother's taxes for 2023.

In 2022, my mother was in assisted living because she needed some help but could still do most of her activities of daily living (ADL) without assistance. My understanding based on IRS Pub 502 was that we could not claim any medical expenses associated with her assisted living for 2022.

In early 2023 her health situation deteriorated and we had to increase her level of care. She was still in assisted living but they were doing at least two ADLs for her. Midway through 2023 she suffered a significant health event and needed to be moved to a long-term care facility (memory care unit) where she has around the clock care and assistance with pretty much every ADL except eating. She also requires "substantial supervision to be protected from threats to health and safety due to severe cognitive impairment" as indicated in the IRS publication.

Based on my understanding of IRS Pub 502, she claim as medical expenses the following:

-For her stay in assisted living in 2023, she can claim her care expenses for the portion of the year she was in assisted living (but not the "rent" portion that she paid for the room and board).
-For her stay in long term/memory care in the second half of 2023, she can claim her entire expense.

Does this seem correct? IRS Pub 502 doesn't specifically list assisted living. There is a section on nursing home that seems to align with what I have above. One of the confusing things about this type of care that I have found is that the terms can be a little difficult to navigate (assisted living, nursing home, long term care, etc)

[SmileyFace]

I have a similar question as I look at my mother's taxes for 2023.

In 2022, my mother was in assisted living because she needed some help but could still do most of her activities of daily living (ADL) without assistance. My understanding based on IRS Pub 502 was that we could not claim any medical expenses associated with her assisted living for 2022.

In early 2023 her health situation deteriorated and we had to increase her level of care. She was still in assisted living but they were doing at least two ADLs for her. Midway through 2023 she suffered a significant health event and needed to be moved to a long-term care facility (memory care unit) where she has around the clock care and assistance with pretty much every ADL except eating. She also requires "substantial supervision to be protected from threats to health and safety due to severe cognitive impairment" as indicated in the IRS publication.

Based on my understanding of IRS Pub 502, she claim as medical expenses the following:

-For her stay in assisted living in 2023, she can claim her care expenses for the portion of the year she was in assisted living (but not the "rent" portion that she paid for the room and board).
-For her stay in long term/memory care in the second half of 2023, she can claim her entire expense.

Does this seem correct? IRS Pub 502 doesn't specifically list assisted living. There is a section on nursing home that seems to align with what I have above. One of the confusing things about this type of care that I have found is that the terms can be a little difficult to navigate (assisted living, nursing home, long term care, etc)

My interpretation is that Assisted Living falls under the category of "similar instution" mentioned in the first paragraph of the Nursing Home section. I ended up claiming the full expenses as I outlined above. Your reasoning seems sound to me (but I am just an ordinary DIY tax person - not an expert) although I would think you could claim from the day she needed help with 2 ADLs.

[nonnie]

I have a similar question as I look at my mother's taxes for 2023.

In 2022, my mother was in assisted living because she needed some help but could still do most of her activities of daily living (ADL) without assistance. My understanding based on IRS Pub 502 was that we could not claim any medical expenses associated with her assisted living for 2022.

In early 2023 her health situation deteriorated and we had to increase her level of care. She was still in assisted living but they were doing at least two ADLs for her. Midway through 2023 she suffered a significant health event and needed to be moved to a long-term care facility (memory care unit) where she has around the clock care and assistance with pretty much every ADL except eating. She also requires "substantial supervision to be protected from threats to health and safety due to severe cognitive impairment" as indicated in the IRS publication.

Based on my understanding of IRS Pub 502, she claim as medical expenses the following:

-For her stay in assisted living in 2023, she can claim her care expenses for the portion of the year she was in assisted living (but not the "rent" portion that she paid for the room and board).
-For her stay in long term/memory care in the second half of 2023, she can claim her entire expense.

Does this seem correct? IRS Pub 502 doesn't specifically list assisted living. There is a section on nursing home that seems to align with what I have above. One of the confusing things about this type of care that I have found is that the terms can be a little difficult to navigate (assisted living, nursing home, long term care, etc)

Please read the information below. I believe you can deduct All of her expenses once she started needing care for 2 ADLs
https://www.elderlawanswers.com/tax-ded ... costs-7184

There have been other threads on this alhough I can't seem to call one up at this time.

[nonnie]

Of course expenses must exceed 7.5% of adjusted gross income.

https://www.payingforseniorcare.com/gui ... deductions

"Assisted living expenses must also meet medical requirements set out by the IRS to qualify for deductions. To qualify, the expenses must be related to medical care, and a doctor must have certified that the person cannot care for themselves.

Assistance With Two or More ADLs
The certification must include documentation showing that the person needs daily help with two or more activities of daily living (ADLs) for 90 days or more. In other words, your parent must be unable to perform two or more of the following for their assisted living expenses to qualify as tax deductible:"

[SmileyFace]

Of course expenses must exceed 7.5% of adjusted gross income.

https://www.payingforseniorcare.com/gui ... deductions

"Assisted living expenses must also meet medical requirements set out by the IRS to qualify for deductions. To qualify, the expenses must be related to medical care, and a doctor must have certified that the person cannot care for themselves.

Assistance With Two or More ADLs
The certification must include documentation showing that the person needs daily help with two or more activities of daily living (ADLs) for 90 days or more. In other words, your parent must be unable to perform two or more of the following for their assisted living expenses to qualify as tax deductible:"

Not sure if a Doctor certification is necessary - that isn't spelled out in Pub502. In my Father's case he has a Nurse signoff on the 2 ADL assists needed. And yup - his AGI is a tiny drop compared to what he is paying for assisted living.

[nonnie]

Of course expenses must exceed 7.5% of adjusted gross income.

https://www.payingforseniorcare.com/gui ... deductions

"Assisted living expenses must also meet medical requirements set out by the IRS to qualify for deductions. To qualify, the expenses must be related to medical care, and a doctor must have certified that the person cannot care for themselves.

Assistance With Two or More ADLs
The certification must include documentation showing that the person needs daily help with two or more activities of daily living (ADLs) for 90 days or more. In other words, your parent must be unable to perform two or more of the following for their assisted living expenses to qualify as tax deductible:"

Not sure if a Doctor certification is necessary - that isn't spelled out in Pub502. In my Father's case he has a Nurse signoff on the 2 ADL assists needed. And yup - his AGI is a tiny drop compared to what he is paying for assisted living.

Other places I have read of the necessity for a certified Care Plan. Sounds like you have met all the requirements
for full deduction.

[pivoprussia]

Hoping to add to this discussion to get some clarification:

My father is in assisted living due to Parkinson's with significant dementia. He forgot how to take his medications and gets very confused as well as conflates issues quite often. He could not function safely at home.

I have asked the AL facility to make sure there is a care plan signed off by a medical professional and the he gets assistance with 2 or more ADLs.
I know they give him the medications because he cannot do that. I'm not sure what else specifically they do that qualifies as an ADL (cook? clean?)

If so, I should be able to deduct his full cost of the AL?

[secondcor521]

Hoping to add to this discussion to get some clarification:

My father is in assisted living due to Parkinson's with significant dementia. He forgot how to take his medications and gets very confused as well as conflates issues quite often. He could not function safely at home.

I have asked the AL facility to make sure there is a care plan signed off by a medical professional and the he gets assistance with 2 or more ADLs.
I know they give him the medications because he cannot do that. I'm not sure what else specifically they do that qualifies as an ADL (cook? clean?)

If so, I should be able to deduct his full cost of the AL?

There are three different sections in Pub 502 (https://www.irs.gov/pub/irs-pdf/p502.pdf) which have been touched on in this thread. In your situation I think item 2 applies:

1. Long term care (page 10). This is care provided to someone who needs help with two ADLs or has cognitive impairment. It seems to be regardless of location, but in context I think this would typically apply to an elderly person who wants to stay in their home but needs care to be able to do so. So having a nursing aide stop by the home and administer necessary medication, or a home health aide who makes sure the person doesn't wander off and get lost.

2. Nursing home care (page 11, but see the comment at the beginning of the Lodging section on page 10). This is if the person is in an old folks home of any type because a primary reason for being there is medical care. By my reading, this would include memory care, assisted living, "old folks home", "nursing home" or any other senior group living situation with medical care. In this category, all food and lodging is deductible. To me, "a primary reason for being there" means you're not there because of the entertainment, or the fine dining, or the mini golf course, or the theater room - you're there because of medical needs such as dementia.

3. Lodging (page 10). This is for a hotel for situations where you need to travel away from home for medical care. If you go to the Cleveland Clinic from your Florida home for cancer treatment, then you can deduct up to $50 per person per night to pay for your room at the Marriott for the patient and one traveling companion. There are some other restrictions.