At least some of the expenses of a nursing home or assisted living facility usually are deductible. The amount of the deductions depends on the circumstances. You have to know the rules to maximize your deduction.
When the primary reason for residing in a nursing home is one’s physical condition and the availability of medical care, the entire cost of the nursing home is deductible. But if medical care is not the primary reason for residing in the nursing home, if the resident needs primarily custodial care, only the costs attributable to medical or nursing care are deductible. Payments for food, lodging, and other personal expenses are not deductible in that case. Most nursing homes provide itemized bills for their services; these are helpful in determining the deductible expenses. You should request one if it is not given.
Deducting the cost of an assisted living facility is trickier, because assisted living primarily is a residential facility not a medical facility. Deductions are the most limited for residents who can perform at least five of the six activities of daily living (eating, toileting, transferring, bathing, dressing, and continence). These individuals deduct only the portion of the costs that are directly for nursing care or other health care. These should be itemized in the bill.
But when the assisted living resident cannot perform two or more of the activities of daily living, the entire cost of the facility can be deducted if the resident has a plan of care in place. A plan of care can be drawn up by a physician, nurse, or physical therapist.