Tax Deductibility of Assisted Living & Memory Care Expenses for 2024

Understanding Assisted Living and Memory Care Tax
Deductions in 2024

The IRS acknowledges that the cost of an Assisted Living or Memory Care community can be a significant financial burden for many families. To help alleviate this challenge, current tax laws allow eligible individuals to deduct a portion of these expenses on their taxes. According to the Genworth Cost of Care Survey, the average annual cost of an Assisted Living community in 2025 is expected to be approximately $5,676 per month or $64,200 annually. Memory Care expenses can be even higher, depending on location, level of care, and accommodations offered.

Is Assisted Living Tax Deductible?

Yes, the deductibility of assisted living expenses depends on whether the services provided qualify as medical care under IRS guidelines (Medical, Nursing Home & Special Care Expenses). If medical care expenses exceed 7.5% of adjusted gross income (AGI) and are itemized, they may be eligible for deductions. For example, if your AGI was $50,000 last year, then you can claim the deduction for the amount of medical expenses that exceed $3,750.

Is Memory Care Tax Deductible?

Similar to Assisted Living, memory care expenses can be written off on taxes with some qualifications and restrictions. People who have an older loved one who meets the definition of a dependent may also be able to take a deduction. The IRS usually considers a qualifying dependent to be a father, mother, grandparent, mother-in-law, father-in-law, stepmother, or stepfather.

If you contribute more than 10% in support as part of a Multiple Support Agreement that pays at least 50% of an Assisted Living or Memory Care resident’s expenses, you could be eligible for a tax deduction. However, it is important to note that only one of the parties involved in the Multiple Support Agreement can claim the loved one as a dependent and get a tax benefit from it.

What Qualifies for the Medical Expenses Deduction in 2024?

Medical expenses often account for a portion of the monthly service and entrance fees at Assisted Living and Memory Care communities. In some cases, residents may be able to deduct their entire monthly rental fee, while others may only qualify to deduct specific personal care services.

While general health expenses—such as health club dues or vitamins—are not deductible, many professional medical costs are.

Common Assisted Living and Memory Care expenses that may be written off include:

• Prescription drug costs, including insulin
• Health insurance premiums
• Mental health expenses, such as therapy sessions
• Dental expenses, including dentures, fillings, X-rays, and other orthodontic appliances
• Travel expenses related to medical care, such as transportation to appointments and parking fees
• Entrance fees for Assisted Living or Memory Care, if directly related to medical care (e.g., care plan development and assessment fees)
• Nursing services, even if provided by someone who is not a licensed nurse
• Meals and lodging at a hospital, provided the primary reason for the stay is medical care and the cost does not exceed $50 per night per person