When Are Assisted Living Expenses Tax Deductible?

The Chamberlain Law Firm

There is no denying that long term care facility costs are rising across the country. The good news is that medical fees—such as assisted living expenses—may be tax deductible. This guide, along with the advice of a seasoned New Jersey estate planning attorney, can help ensure that you are utilizing these advantageous tax provisions.

How to Qualify For Tax Deductions

There are three important criteria to meet to determine whether your assisted living expenses qualify as deductible. First, the expenses must account for more than a certain amount of your gross adjusted income. That amount is 7.5% if you are a senior citizen 65 or older, and 10% if you are under 65.

Second, you must have a personal care plan. This is an agreement with your medical provider about the administration of your healthcare. The plan is drafted by a licensed healthcare professional, such as a doctor, nurse, or social worker. If you live in an assisted living facility, then it is possible that your assisted living facility has a personal care plan for you. However, you should not assume that they do, so be sure to ask. If not, there are form personal care plans that you can complete with your medical professionals. Aside from the tax deduction, there are many benefits to having a personal care plan, such as reducing emergency room visits and maintaining your independence.

Lastly, you must be deemed chronically ill by a healthcare professional. This means that you have an illness that causes a cognitive impairment, such as dementia, and need assistance with at least two activities of daily living. Daily living activities include skills related to mobility, feeding, dressing, personal hygiene, continence, and toileting.

Be sure to have all necessary documentation on hand when working with your attorney or tax professional to take advantage of these tax breaks, such as tax returns, your personal care plan, and any correspondence from your healthcare providers.


It is worth noting that certain assisted living expenses are not deductible. For example, housing fees are not tax deductible unless you are residing in an assisted living facility for the sole purpose of receiving medical care. If you are living in an assisted living facility for primarily non-medical reasons, then only your medical care costs are deductible. Additionally, medical costs covered by your insurance are not deductible.

It may feel overwhelming and confusing to go through your bills to determine whether your long term care costs are deductible or not. Luckily, an expert estate attorney has the tools and experience to comb through the expenses incurred at your assisted living facility to see which ones of your expenses are deductible.


For seniors in the Garden State, the rising costs of long term care may seem daunting. Luckily, help is available. The experienced professionals at the Chamberlain Law Firm are here to help you save where you can. Give us a call at (201) 273-9763 or fill out our contact form today to set up a consultation.

This article is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a lawyer about the specifics of your case, contact The Chamberlain Law Firm at (201) 273-9763 to schedule a consultation.

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