Tax & Insurance Advantages

Tax Advantage

According to the Internal Revenue Code Section 213, the costs of long-term care, including nursing home care, are deductible as medical expenses to the extent they, along with other medical expenses, exceed 7.5% of adjusted gross income.
Criteria for deducting qualified long term care expenditures are as follows:
The resident must be unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days due to loss of functional capacity, or the resident requires substantial supervision to protect their health and safety due to severe cognitive impairment. Activities of daily living include eating, toileting, transferring, bathing, dressing, and continence.
Qualifying long-term care services include necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services required by a chronically ill individual.
The services are provided under a plan of care presented by a physician or a licensed health care practitioner.
Amounts paid to a nursing home are fully deductible as a medical expense if the principal reason that a person stays at the nursing home is for medical, as opposed to custodial care.
For Information Only
You should contact a professional Certified Public Accountant or personal tax advisor for the most accurate tax advice. They can help you determine the proper tax treatment of payments and potential tax deductions based upon your specific situation.

Insurance Advantage

Most long term care insurance policies will help pay for expenses at a skilled nursing facility. We have licensed staff on duty to provide the assistance with daily activities that these types of policies require. Check with your insurance agent to see if your plan covers skilled nursing care.