Inside this Article:

While many Florida seniors choose assisted or independent living, others prefer to age at home for as long as it makes sense. This often means you will need some in-home care and maybe some home modifications.

As you navigate the financial landscape of in-home care for your loved one, you might wonder if any associated costs can be claimed as a tax deduction. The answer to this hinges on the specific care provided at home, as the Internal Revenue Service (IRS) has stringent rules about what qualifies as deductible.

The Basics of In-Home Care and Tax Deductions

lady using calculator

Generally, the medical aspect of home care may be eligible for a tax deduction. However, only some tasks a caregiver performs in the home can be deducted from your taxes. Broadly speaking, the medical portion of care could be eligible for a tax deduction, while other household tasks might not be. Running errands, providing companionship, or handling various household chores are not deductible.

Monitoring how much time a caregiver spends performing non-medical tasks is essential. Only the time spent on medically necessary duties can be claimed as part of the medical expense deduction.

The Fine Print of In-Home Care Deductions

The IRS allows for deducting medical expenses contingent on your adjusted gross income. Specifically, you can only claim deductions for costs that surpass 7.5% of your adjusted gross income.

In some cases, you can declare certain home modifications as a medical expense as long as these adjustments do not increase the value of your home. More on that below.

Navigating Medical Deductions for In-Home Care

nurse helping woman

Whether in-home care is tax-deductible depends on the nature of the services provided and their medical necessity.

Home care often includes assistance with activities of daily living (ADLs), which could be a deductible expense. According to the IRS, a physician needs to document the need for this assistance. Specifically, the individual should require substantial assistance with at least two ADLs for at least 90 days. These activities encompass:

  • Bathing
  • Continence
  • Dressing
  • Eating
  • Toileting
  • Transferring

Remember, a caregiver may also perform tasks that do not qualify for a deduction. In these scenarios, you should keep a record of how much time the caregiver devotes to nondeductible tasks and only deduct the portion of your expenses spent on medical services. Record keeping may seem like a burden, but when qualifying for deductions, written records are essential.

Nondeductible In-Home Care Expenses

Specific tasks a caregiver performs at home do not qualify for a tax deduction. These include:

  • Companionship
  • Meal preparation

As you explore the possibility of deducting home care expenses from your taxes, remember to consult with a tax professional to ensure you’re following the correct procedures and maximizing your deductions.

The IRS provides specific guidelines about which home care expenses are deductible. Not all tasks performed by a caregiver fall into the tax-deductible category.

It’s worth noting that there isn’t a specific tax deduction for home health care or home care. However, many services that your loved one receives at home can be claimed as a medical expense. These are outlined in IRS Publication 502.

Home Modifications May be Tax Deductions

man fixing house

As the requirements for care increase, home modifications often become necessary to safely accommodate the needs of seniors dealing with certain worsening conditions or diseases. The IRS allows certain home modifications to be included as medical expenses, provided their primary purpose is medical care for you, your spouse, or your dependent.

Home improvements that do not increase the value of your property can be fully included as a medical expense. These modifications could include:

  • Constructing entrance or exit ramps for your home
  • Widening doorways at entrances or exits to your home
  • Modifying hallways and interior doorways
  • Installing railings, support bars, or other modifications to bathrooms
  • Lowering or modifying kitchen cabinets and equipment
  • Moving or modifying electrical outlets and fixtures
  • Installing porch lifts and other forms of lifts (but elevators generally add value to the house)
  • Modifying fire alarms, smoke detectors, and fall detection sensors
  • Modifying stairways
  • Adding handrails or grab bars anywhere (whether or not in bathrooms)
  • Modifying hardware on doors
  • Modifying areas in front of entrance and exit doorways
  • Grading the ground to provide access to the residence

In addition, the amounts you pay for the operation and upkeep of a capital asset qualify as medical expenses as long as the main reason for them is medical care.

Even if you’re renting, amounts paid to buy and install special plumbing fixtures for a person with a disability, primarily for medical reasons, are considered medical expenses.

While home care expenses can be complex, with careful planning and recordkeeping, it’s possible to manage them effectively and deduct a portion of these costs from your taxes.

Always consult a tax professional to ensure you’re making the most of the available deductions and complying with IRS rules.

Remember, it’s essential to keep track of all your home care expenses, including the specific tasks performed by caregivers and the time spent on them. And it’s crucial to understand the distinction between deductible medical expenses and nondeductible personal care services.

As always, please consult with a tax professional for personalized advice.

Need Help Figuring Out In-Home Care?

couple meeting with consultant

Aging in the comfort of their homes is preferred by many seniors. But there are some in-home care expenses. These may include home health aides, caregivers, nurses, and more. And you may need some home modifications like handrails, special counters, cabinets, and non-slip floors.

While aging at home brings peace and comfort, deciding the best in-home healthcare plan can be overwhelming.

Let us help.

While senior options and decisions can seem confusing, this is all we do.

We are a Florida-based company with expert knowledge of the Florida senior market. Whether it’s aging in the comfort of your home or transitioning to a beautiful assisted living community, we can help you decide your best plan forward.

We have certified staff, professional nurse advocates, and decades of experience in the field.

Senior living should be on your terms, and the choice should always be yours.

Call us, and we will answer all your questions and help you decide what is best for you or your senior loved one.

For peace of mind, call us at (800) 969-7176 or visit us at FloridaSeniorConsulting.com.

 

Contact Florida Senior Consulting

(800) 969-7176