The costs associated with caring for any serious medical condition can be substantial. The cost of memory care can also be significant. This creates stress on caregivers and loved ones. Fortunately, you may be able to take advantage of tax benefits to help you pay for memory care expenses. The extent of the tax benefits you can use depends on certain factors.
Medical Expenses
If you are caring for a family member with memory care needs, you may be able to deduct certain expenses from your taxes when you file your return. As the Alzheimer’s Association clarifies, these expenses include “medical fees for diagnosis, prevention of disease, cure, hospital services, some long-term care and nursing services, and insurance premium payments for accident and health insurance.”
However, your medical expenses must exceed 7.5% of your adjusted gross income for you to be able to deduct them.
Expenses of Staying in Memory Care Community
If your loved one is a resident of a memory care community, the tax benefits work a little differently. For example, if your family member is staying at your home, and you are providing care, only the actual medical care is covered by the tax benefit. On the other hand, as the IRS advises, “If you, your spouse, or your dependent is in a nursing home primarily for medical care, then the entire nursing home cost (including meals and lodging) is deductible as a medical expense.”
This is helpful as you determine whether it makes financial sense for your family member to get care from a memory care community or to stay with you or their own home.
Caregiver Tax Credits
If you are providing primary care for a family member with memory care needs, you may be able to tap into additional tax credits. In some states, you can be eligible for tax credits for the care you provide. The credits are designed to help relieve the financial burden of meeting the person’s physical and emotional needs. The credits will cut down on how much you owe in income taxes. States have different guidelines and requirements for qualifying for this credit.
Long-Term Care Insurance
Whether your loved one is in a community for memory care or is receiving at-home care, long-term care insurance may be available. This coverage can help reduce your costs for medical needs. To qualify, the covered person must meet age requirements and must have the policy before experiencing serious health issues. The premiums of long-term care insurance may be tax deductible.
If you are worried about the financial obligations of caring for your loved one with dementia or Alzheimer’s disease, consider these tax benefits. You can ensure that your family member has the care they need without feeling as much of the financial pressure.
Let us help you explore available financial plans so your family member can start enjoying the care, safety and comfort of one of our memory care communities. For further support, contact a local Grand Brook Community Relations representative. Contact us today.
Disclosure: Grand Brook Memory Care is NOT a financial advisor or a tax specialist. Before making any kind of financial decision, please contact your personal financial advisor or tax professional for the most appropriate information for your particular situation.
