Tax deductions can be a useful way to balance the cost of senior living. You may be eligible for certain deductions on your federal tax return, depending on the type of services and the level of care you require.

The IRS allows deductions for the cost of housing and meals for older people receiving long-term care in a home or community due to chronic illness or the inability to live alone. Assisted living residents may qualify for this deduction if a physician certifies that they have been unable to perform at least two daily activities (such as eating, toileting, bathing or dressing) without assistance for at least 90 days. The same deduction can apply to people who require substantial supervision because of cognitive impairment such as Alzheimer’s disease.

An adult child paying for his or her parent’s care may also qualify for the tax deduction, if the parent is a dependent. For a parent to qualify as a dependent, he or she must be related to the child or have lived with the child for the entire year as a member of the household. He or she also must be a U.S. citizen or resident, or a resident of Canada or Mexico, for some part of the calendar year in which the tax year began. The child must have provided over half of the total support for the parent for the calendar year.

Atria does not provide individual tax advice; please consult a tax advisor for further information.