Are Assisted Living Costs Tax Deductible?
Most families ask this question in April, staring at a year of facility bills and hoping the tax return will return some of it. The honest answer is narrower: the tax code treats medical care and housing differently, even on the same monthly statement. Sorting the bill into those two parts decides the deduction.
Sources: IRS Publication 502, Medical and Dental Expenses, and IRS guidance on health savings accounts and flexible spending accounts; accessed October 2026.
The chronically ill test decides the question
IRS Publication 502 sets the test. Your parent counts as chronically ill for this purpose if a licensed practitioner certifies, under a written plan of care, that your parent needs help with at least two activities of daily living, such as bathing, dressing, eating, and continence, for at least 90 days, or needs substantial supervision because of cognitive impairment. Both parts matter: the need must be certified and inside a written plan of care. A family belief that help is needed, without that certification and plan, does not meet the test.
Get the paperwork before tax season, not during it. Ask the facility and the licensed practitioner for the written plan of care and the certification, and keep them with the tax records for that year. If the plan starts mid-year, keep the start date clear.
The 90-day condition means the help is expected to last at least 90 days, not that your parent must have already received 90 days of help before any cost counts. A short stay with a plan that expects longer care is judged on the plan, while a stay with no plan at all fails the test on paperwork alone.
What counts, and what does not
When the chronically ill test is met, the care portion of the assisted living bill counts as a medical expense. That is the portion paid for nursing care, personal care, and related medical services. Room and board generally does not count, because housing and meals are personal living costs, not medical care. The exception in Publication 502 framing is narrow: if the resident is chronically ill and the facility's main purpose is providing medical care, then the full cost, including room and board, can count. A community whose main purpose is housing with some care services does not meet that exception, even if your parent personally receives a lot of care there.
That is why no fixed split percentage appears on this page. Facilities differ in how much of the bill is care and how much is housing, and the IRS gives no single percentage that fits every community. Ask the facility for an itemized statement that splits the bill into care and room and board, and keep that statement with the plan of care. That split is what turns the general question are assisted living costs tax deductible into a number you can actually file. A deduction claimed without a split rests on a guess, and a guess is a weak position if the return is examined.
Keep the same split logic for every related cost. A medical service billed separately, such as a visiting nurse charge, is judged on its own terms. A social activity fee, a guest meal, or a housing upgrade is not medical care because it appears on a facility statement. The nature of the cost decides the deduction, not the label on the bill.
The 7.5 percent of AGI threshold, with a worked example
Even qualifying medical expenses are not deducted in full. The deduction covers only the amount above 7.5 percent of adjusted gross income, and only for a taxpayer who itemizes. Two gates, not one: the expenses must qualify, and the total must clear the threshold.
Here is a worked example, using round figures that are an illustration only. Suppose adjusted gross income is $60,000. Multiply by 7.5 percent: $60,000 times 0.075 equals $4,500. Suppose qualifying medical expenses total $10,000. Subtract the threshold: $10,000 minus $4,500 equals $5,500, the amount above the threshold that enters the itemized deduction calculation, subject to the other rules on the return. Re-run it with your own figures, because a different income or total changes the result dollar for dollar.
Note what the threshold does to small claims. If qualifying expenses total less than 7.5 percent of adjusted gross income, the deduction for that year is zero, even though the expenses were real medical costs. Run the threshold math early.
| Part of the bill | Generally deductible? | Why |
|---|---|---|
| Care portion, chronically ill test met | Yes, above 7.5 percent | Qualifying medical expense |
| Room and board, ordinary community | Generally no | Personal living costs |
| Room and board, care as main purpose | Yes, if chronically ill | Narrow Publication 502 exception |
| Separate medical services | Yes, above threshold | Judged on their own terms |
| Social activities, guest meals, upgrades | No | Not medical care |
Are home care costs tax deductible?
The same rules apply at home. Home care costs can count as medical expenses when the care qualifies, the chronically ill test is met where required, and the costs clear the 7.5 percent threshold for a taxpayer who itemizes. A home health aide hired for qualifying personal care sits in the same framework as the care portion of a facility bill. A housekeeper hired for cleaning alone does not, because cleaning is household help, not medical care.
Keep the same records at home as in a facility: the written plan of care, the certification where required, itemized invoices, and proof of payment. For the price side of home care, read home health aide cost per hour.
Are retirement home expenses tax deductible?
Generally, no. A retirement home that mainly provides housing, meals, and social life is not a medical care facility, so its charges are personal living costs, not medical expenses. The test is the facility's main purpose and the nature of each charge, not the age of the residents or the name on the building.
The exception is the same narrow one as above: if a resident is chronically ill and the facility's main purpose is providing medical care, the costs can count. A retirement community that adds a care wing does not automatically change its main purpose. Split the bill, keep the plan of care, and claim only the care part unless the narrow exception plainly applies.
Can a health savings account or flexible spending account pay?
A health savings account can pay for qualifying medical expenses, which means the care portion that counts under Publication 502 can be paid from the account, subject to the account's own rules. Room and board that does not count cannot be paid from the account as a medical expense. The account does not change what counts. It only changes how a qualifying cost is paid.
A dependent care flexible spending account is a different account with a different purpose. It covers care for a qualifying dependent that lets the account holder work, and elder care can fall inside it when the dependent and work tests are met. That is not the medical expense deduction. Check each plan document, and claim each cost under the route whose rules it meets.
If you claim your parent as a dependent, the dependent rules also shape the medical expense question, because who can claim the expense depends on the tax relationship and who paid. Read can I claim my mom as a dependent before assuming the deduction belongs on your return rather than your parent's. This page states no dependent dollar figure, so it does not restate a figure that may change.
Frequently asked questions
Can you deduct the costs if your parent pays the bill?
Yes, the deduction can sit on the return of the taxpayer who paid the qualifying medical expense and meets the other rules, which may be your parent's own return. Who paid matters as much as who received the care. If you pay, the claim depends on your tax relationship to your parent, so confirm the dependent rules on the linked page before filing.
Do state taxes follow the federal medical expense rules?
Not always. States set their own tax rules, and a state return may use a different threshold, a different itemizing rule, or no medical expense deduction at all. A federal deduction does not guarantee a state deduction. Check the state return instructions for the year in question.
What records should you keep for an assisted living deduction?
Keep four items together: the certification and written plan of care, the facility's itemized care split, receipts or bank records proving payment, and a note of the dates the plan covered. If the facility changes its billing format mid-year, keep both formats.
Does the deduction year follow the year of care or the year of payment?
The year of payment controls the timing. Medical expenses are generally deducted in the year they are paid, not the year the care was received, for a taxpayer on the cash basis most individuals use. A December bill paid in January belongs to the January year.
Your next step on are assisted living costs tax deductible is to ask the facility for its itemized care split, confirm the written plan of care and certification are on file, and run the 7.5 percent threshold math on your own figures. Then work the wider plan through the Paying for Care hub and how much does assisted living cost.