Nursing home fees are tax deductible only if the facility is primarily providing medical care, and only the portion that covers medical services — not room and board.

The IRS treats nursing home costs differently depending on why someone is there. If a person is in a nursing home mainly because they need skilled nursing care or medical treatment, the medical portion of the bill may be deductible as a medical expense. If they are there primarily for custodial care — help with daily living activities like bathing, dressing, and meals — the costs are generally not deductible, even if a nurse is on staff.

The distinction matters because it changes what you can claim. You will need to separate the medical charges from the room-and-board charges on your nursing home bill. Only the medical portion counts toward the deduction, and you can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI) in the tax year you paid them.

Key Takeaways

  • Nursing home costs are deductible only if the primary reason for admission is medical care, not custodial information with daily living.
  • You must separate medical charges from room-and-board charges on your bill; only the medical portion may be deductible.
  • Medical expenses are deductible only if they exceed 7.5% of your adjusted gross income in the year you paid them.
  • The nursing home must provide an itemized statement showing what portion of the bill covers medical care versus room and board.
  • A tax professional or CPA can help you determine whether your specific situation qualifies and how to report it correctly.

How the IRS Decides What Counts as Medical Care

The IRS looks at the primary reason the person entered the nursing home. If a doctor determined that the person needs skilled nursing care — such as wound care, medication management, physical therapy, or monitoring of a medical condition — then the facility is providing medical care. In that case, the medical portion of the bill may be deductible.

If the person is in the nursing home mainly because they cannot live independently and need help with activities of daily living (bathing, dressing, toileting, eating), the IRS considers this custodial care. Custodial care is not deductible, even if the facility has nurses on staff and the person takes medications there.

Some people are admitted for both reasons — they need medical treatment and also cannot manage daily living tasks. In these mixed situations, the IRS looks at which need is primary. Your doctor's notes and the admission paperwork from the nursing home can help show what the primary reason was.

Separating Medical Charges from Room and Board

Your nursing home bill likely combines several costs: the room, meals, general care, and medical services. To claim a deduction, you need an itemized statement from the nursing home that breaks down what you paid for medical care separately from what you paid for room and board.

Request this breakdown in writing from the nursing home's billing department. The statement should show charges for things like nursing care, medications, medical equipment, therapy, and doctor visits — these are the medical portions. Room, meals, and general information are not medical and cannot be deducted.

If the nursing home cannot or will not provide an itemized statement, ask your tax professional how to proceed. Some facilities provide only a lump-sum bill, which makes it harder to claim a deduction. In those cases, you may need documentation from the facility or your doctor to support what portion was medical.

The 7.5% Threshold and How to Calculate It

Even if your nursing home costs are primarily medical, you can only deduct the amount that exceeds 7.5% of your adjusted gross income (AGI) for that tax year. This is called the medical expense threshold.

Here is how it works: If your AGI is $50,000, the threshold is $3,750 (7.5% of $50,000). If your medical expenses for the year — including the nursing home medical portion, doctor visits, prescriptions, and other may have access to costs — total $8,000, you can deduct only $4,250 ($8,000 minus $3,750). If your medical expenses total $3,500, you cannot deduct any of them because they do not exceed the threshold.

You add up all your medical expenses for the year, subtract 7.5% of your AGI, and the remainder is what you can deduct. This is why it often makes sense to bunch medical expenses into one tax year if you can — for example, scheduling elective procedures in the same year as a nursing home admission — to push past the threshold.

Who Can Claim the Deduction

Usually, the person who paid the nursing home bill is the one who claims the deduction. If you paid the bill for a parent, spouse, or other family member, you may be able to claim it if you also provided more than half their financial support for the year and they are a U.S. citizen, national, or resident alien.

If multiple family members share the cost, only one person can claim the deduction for that expense. You will need to decide who has the highest tax benefit from claiming it — usually the person with the highest income, since the deduction is worth more the higher your tax bracket.

If the nursing home resident is married and files jointly with a spouse, they can claim the deduction together. If they file separately, only the spouse who paid the bill can claim it.

Documentation You Will Need

Keep records of everything related to the nursing home stay and its costs. You will need:

  • The itemized bill from the nursing home showing medical charges separately from room and board.
  • Receipts or cancelled checks proving you paid the bill.
  • Medical records or a letter from the doctor explaining why the person needed nursing home care.
  • The admission paperwork from the nursing home, which usually states the reason for admission.
  • Any correspondence with the nursing home about the medical services provided.

The IRS may ask to see these documents if you are audited, so keep them for at least three years after you file your return. If the nursing home cannot provide an itemized statement, save any documentation that shows what portion of the bill was for medical care versus room and board.

When a Tax Professional Can Help

Nursing home deductions can be complicated, especially if the person is there for both medical and custodial reasons, or if the nursing home does not provide a clear itemized bill. A tax professional or certified public accountant (CPA) can review your specific situation and help you determine whether you may have access to for a deduction and how much you can claim.

They can also help you understand whether it makes sense to claim the deduction on your current return or to adjust a prior return if you missed it in a previous year. Some people do not realize they can deduct nursing home costs until years later, and the IRS allows you to file an amended return to claim the deduction if you are still within the time limit.

A tax professional can also advise you on whether to bunch other medical expenses into the same year to exceed the 7.5% threshold, which can significantly increase your deduction.

Frequently Asked Questions

Can I deduct nursing home costs if the person is there for Alzheimer's or dementia?

It depends on why they are there. If they are in the nursing home because they need skilled medical care related to the condition — such as medication management or monitoring — the medical portion may be deductible. If they are there primarily because they cannot live independently and need custodial care, it is not deductible. Your doctor's notes and the admission paperwork will help show the primary reason.

What if the nursing home bill does not separate medical costs from room and board?

Ask the billing department to provide an itemized statement. If they cannot, ask your tax professional how to proceed. You may be able to use the nursing home's general pricing structure or a letter from your doctor to estimate the medical portion, but you will need documentation to support it if audited.

Can I deduct nursing home costs if someone is there for rehabilitation after surgery?

Yes, if the primary reason for admission is medical rehabilitation. Costs for skilled nursing care, physical therapy, and medical monitoring during recovery are deductible as medical expenses. Room and board are not, so you will need an itemized bill showing the breakdown.

Do I have to file itemized deductions to claim nursing home costs?

Yes. Medical expenses, including nursing home costs, are claimed as itemized deductions on Schedule A of your tax return. You can only benefit from the deduction if your total itemized deductions exceed the standard deduction for your filing status. A tax professional can help you determine whether itemizing makes sense for you.

Can I deduct nursing home costs paid with Medicaid?

No. You can deduct only the costs you actually paid out of pocket. If Medicaid covered the nursing home bill, there is nothing for you to deduct. If you paid part of the bill and Medicaid covered the rest, you can deduct only your portion.