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Nolan Elder Law and Estate Planning, LLC Blog

Monday, October 3, 2016

You Mean I can deduct Mom or Dad's medical expenses? How?

The expenses related to home healthcare and assisted living may be tax-deductible if they exceed 7.5% of adjusted gross income and the following conditions are met.

 

According to Internal Revenue Code 7702B, a chronically ill person is defined as someone that meets either of the following descriptions:

 

1. He or she is unable to perform at least two activities of daily living (ADLs) without substantial assistance from another individual for at least 90 days due to a loss of functional capacity. (Activities of daily living are eating, toileting transferring, bathing, dressing and incontinence.)

2. He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

 

In order to qualify with the IRS for the deduction of long-term care, non-medical expenses for either or both of these conditions, the elder or their family must obtain a letter from a licensed health care practitioner who is a physician, a registered nurse or a licensed social worker. This letter must state that the taxpayer meets one or both of the conditions above and detail the plan of care prescribed to address these conditions. Deductible long-term care costs will be those that are consistent with the services prescribed by the plan of care. The letter does not have to be elaborate but must be specific.

 

You are encouraged to confer with a tax professional to determine if the facts and circumstances meet the IRS deductibility criteria. IRS Publication 502 has more detailed information and other potential tax benefits. It can be downloaded from www.irs.gov/formspubs/index.html.


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