Is assisted living tax-deductible? What you can and can’t claim
Some assisted living expenses are tax-deductible. The U.S. Internal Revenue Service (IRS) allows filers to deduct qualified medical expenses, including for certain long-term care services, if the total unreimbursed medical costs exceed 7.5% of the filer’s adjusted gross income (AGI) and if the filer itemizes deductions. If the resident meets the IRS definition of chronically ill, more of their assisted living costs may qualify. However, nonmedical expenses, such as room and board, meals, and general housing costs, typically aren’t deductible. When in doubt, always consult a tax professional. A Place for Mom shares an overview of what you can and can’t claim when it comes to assisted living.
Key takeaways
- The IRS allows taxpayers to deduct the medical portion of assisted living expenses if their total qualified medical expenses exceed 7.5% of their adjusted gross income (AGI).
- Long-term care expenses are also deductible if the person meets the IRS’ definition of chronically ill.
- Nonmedical expenses aren’t deductible and include rent, meals, and products and services that weren’t prescribed by a health care provider.
- You can claim a loved one’s eligible care costs as tax-deductible expenses if you and they meet certain criteria.
When are assisted living expenses tax-deductible?
Assisted living and long-term care expenses are tax-deductible when they meet certain criteria established by the IRS. These criteria include, but aren’t limited to:
- The nature of the expense
- The amount of the expense relative to the filer’s AGI
- The health condition of the person on whose behalf the expense was incurred
What kind of care expenses are deductible?
IRS Publication 502 defines deductible medical expenses as “the cost of equipment, supplies, devices, and services whose purpose is to diagnose, cure, mitigate, treat, or prevent disease that affects any body part or function.”
Certain assisted living costs, such as rent, or room and board, personal grooming services, nonprescription medicine, health club dues, and other services, aren’t deductible on a federal tax return because they don’t satisfy the IRS’ definition of eligible medical expenses.
How much of assisted living expenses are deductible?
The deductible amount is the portion of qualified medical expenses that exceeds 7.5% of the filer’s adjusted gross income , provided the filer itemizes deductions.
What health conditions qualify a person to have deductible care expenses?
According to the IRS, some long-term care expenses are tax-deductible when the person receiving them is considered chronically ill. Thus, the help that person receives to complete activities of daily living (ADLs) is considered medical in nature.
The IRS defines a chronically ill person as someone whose health care provider has documented in their care plan that they need assistance with two or more ADLs. These include:
- Bathing
- Dressing
- Eating
- Toileting
- Transferring
- Continence
A person is also considered chronically ill if their health care provider has determined that they need substantial supervision to stay safe due to cognitive impairment. This means that many memory care expenses are also tax-deductible.
Which assisted living costs are considered medical expenses?
Some common assisted living expenses that are generally tax-deductible include:
- Medication management
- Prescription medications
- Assistance with ADLs
- Therapies that are part of medical treatment or a plan of care
- Dementia care services
- Transportation to and from medical appointments
This isn’t an exhaustive list, and your loved one may have other medical expenses that qualify for a tax deduction, such as durable medical equipment, hearing aids and repairs, eyeglasses and contacts, and laboratory fees. Equipment, such as a wheelchair, is only deductible in the year it was purchased. Equipment rental fees are also deductible. If you’re unsure about what you can deduct, consult a tax professional.
Can I claim my parent’s assisted living expenses on my federal tax return?
Yes, you can claim your parent’s eligible assisted living expenses on your federal tax return, provided that certain conditions are met. According to the IRS, you can deduct the total cost of medical expenses for yourself, your spouse, and your dependents that exceeds 7.5% of your AGI. You must also itemize deductions to claim these expenses.
To claim a parent as a dependent on your federal tax return, they must meet all these requirements:
- Their gross income for 2025 must be less than $5,200.
- They must receive more than half of their support from you.
- They must meet U.S. residency requirements.
- They must not file a joint tax return.
- They must be your dependent at the time they received the equipment, supplies, devices, or services.
Do my parent’s Social Security benefits count toward the annual income limit?
Everyone’s situation is different, but you can expect that a percentage of your parent’s Social Security benefits will count towards their gross income.
What if I can’t claim my parent as a dependent on my federal income tax return?
Even if you can’t claim your parent as a dependent, you may still receive the medical expense deduction through specific exceptions. This generally applies if you would have been able to claim your parent as a dependent but were prevented from doing so for one of the following reasons:
- Their gross income exceeded $5,200 in 2025.
- They filed a joint tax return.
- You (or your spouse, if filing jointly) could be claimed as a dependent on someone else’s return.
If you need help talking about assisted living with your loved one, this conversation guide offers helpful strategies.
How do I deduct assisted living expenses?
To deduct assisted living expenses, follow the steps below.
Step 1: Confirm the expenses qualify as medical or dental care
Request an itemized statement from your loved one’s assisted living community. Be sure it separates medical services, such as medication management, therapy, or help with ADLs, from nonmedical costs like rent and meals.
Step 2: Calculate your total unreimbursed medical expenses
Add up all qualified medical expenses you paid during the year, including assisted living medical costs, and subtract any reimbursements.
Step 3: Subtract 7.5% of your adjusted gross income (AGI)
Only the portion of total medical expenses that exceeds 7.5% of your AGI is deductible.
For example, if your AGI is $100,000 and you paid $10,000 in qualified medical expenses, you can only deduct $2,500. The first $7,500 (7.5% of $100,000) isn’t deductible.
Step 4: Itemize your deductions
You must file an itemized tax return (Schedule A) rather than take the standard deduction to claim the medical expense deduction.
Are medical expenses deductible on state income tax returns?
At the state level, the rules for deductible medical expenses vary. Most states, but not all, also allow for some amount of medical expenses to be deducted. In states that do allow this deduction, most have set the threshold at 7.5% of a filer’s federal AGI. But a few states use higher or lower thresholds. For example:
- Arizona. All qualified medical expenses are fully deductible.
- Alabama. Qualified medical expenses greater than 4% of a person’s state AGI are deductible.
- New York. Qualified medical expenses greater than 10% of a person’s federal AGI are deductible.
Beyond tax deductions: planning for assisted living costs
If tax savings aren’t sufficient to offset the cost of care, you and your loved one may decide to look into other payment options for long-term care or to find more affordable assisted living.
This story was produced by A Place for Mom and reviewed and distributed by Stacker.
