Tax season can be tricky for anyone. For seniors and their families, one potential source of confusion is determining who can—and who can’t—deduct senior care expenses on their taxes.

Some families aren’t even aware there is a tax deduction available, and others find the process too confusing to navigate. Families often ask if there is an easy way to figure out if they are eligible for a tax deduction and how much they might be able to deduct.

Much of the confusion stems from trying to determine a) what portion of a senior’s monthly fees are considered to be medical care and b) if a senior loved one meets the criteria to be considered a dependent.

There isn’t a universal answer to either of those questions. We can, however, point you to a few sections of the tax code you can read to learn more.

Senior Care Expenses and Tax Deductions

Being able to deduct some expenses can help families who are struggling to create a budget for financing senior care, so it’s a good idea to learn all that you can. There are two different IRS publications that discuss medical expenses and dependent status as they relate to deducting senior care expenses:

  • IRS Tax Publication 502: Here you will find the IRS rules regarding medical and dental expenses. You can read this section of the tax code to better understand what costs the IRS considers to be medical care. It will also help you calculate whether or not the financial support you give your loved one meets the standard for a “qualifying relative” so you can claim them as a tax deduction.
  • IRS Tax Publication 503: This publication covers senior care tax-related issues families need to be aware of, including the criteria that must be met to claim a tax deduction and what you can deduct for a spouse’s medical care.

Because senior care tax deductions are so complicated, it is generally best to seek the advice of an accountant or financial planner who has experience in the aging services industry.

Financing Senior Care for a Loved One

There are other avenues for financing senior care that older adults and their families might not be aware of:

  • Veterans benefits
  • Long-term care insurance
  • Bridge loans
  • Reverse mortgages
  • Life-settlement funding

Team members at each of the Sunrise Senior Living communities across the country can walk you through these options in greater detail. Call the Sunrise community nearest you to set up a time to visit and learn more.


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