Deducting Nursing Home Costs on a Parent's Tax Return: The Medical Expense Deduction, the 7.5% Floor and When an Adult Child Can Claim It

Few decisions test a family more than moving a parent into full-time care. The months that follow are often taken up by care plans, facility meetings and a steady stream of monthly statements.

That said, the same statements that strain a household budget can also have tax consequences, and many families never look at them. The federal tax code treats much of what a nursing home charges as medical care, and with tax season ahead, it is worth knowing how that treatment works before the return is filed.

This guide walks through the medical expense deduction, the 7.5% floor that limits it, the chronic-illness certification that opens the door for assisted living and memory care, and the dependent rules that decide when an adult child — rather than the parent — is the one who can claim it.

How The Medical Expense Deduction Works

Section 213 of the Internal Revenue Code allows taxpayers who itemize to deduct unreimbursed medical expenses paid for themselves, a spouse and their dependents. The IRS explains the rules in Publication 502, Medical and Dental Expenses, which is revised each tax year.

Keep in mind that the deduction has two built-in limits. First, only the portion of medical costs that exceeds 7.5% of adjusted gross income (AGI) is deductible, and second, the deduction is claimed on Schedule A, so it only helps if total itemized deductions are larger than the standard deduction.

The 7.5% threshold was made permanent by the Consolidated Appropriations Act, 2021, so it no longer changes from year to year the way it did in the past. What does change each year is the standard deduction, which includes an additional amount for filers age 65 and older. That is why the decision to itemize is worth rechecking every year rather than carried over from the last return.

What The Floor Looks Like At Different Incomes

Because the floor is a percentage, it scales with income. The table below is simple arithmetic at sample AGI levels — it does not estimate what any family will actually pay for care.

The $50,000 column is a placeholder chosen to keep the math easy to follow. For current facility pricing, our breakdown of nursing home costs in 2026 covers national and state-level ranges from published surveys.

There is a second lesson in the table that many families miss. A parent with modest income often has little taxable income for a large deduction to offset, and unused medical deductions do not carry forward to later years. As a result, the same expense can be worth more on the return of a working adult child, which is why the dependent rules later in this guide matter.

When Nursing Home Costs Count In Full

Publication 502 draws its line based on the reason a person is in the facility. If the main reason is the availability of medical care, the entire cost — including meals and lodging — counts as a medical expense.

However, if a parent lives in a facility mainly for personal reasons, only the part of the bill for medical or nursing care counts. In that case, meals and lodging are treated as personal living expenses.

A parent admitted for skilled rehabilitation, or for round-the-clock nursing care for a chronic condition, usually falls on the medical side of that line. The facility's admission records and the clinical documentation behind a level-of-care assessment help show why the parent is there.

Medicare Days And Coinsurance

Medicare Part A covers up to 100 days of skilled nursing facility care per benefit period after a qualifying inpatient hospital stay, with a daily coinsurance starting on day 21. Amounts Medicare pays are not deductible by anyone, because no family member paid them.

On the contrary, the daily coinsurance a family pays out of pocket for days 21 through 100 is a medical expense, and so is private-pay care from day 101 onward. Families on a private plan can find how coverage differs in our guide to Medicare Advantage skilled nursing coverage.

Assisted Living, Memory Care And The Chronic-Illness Certification

Assisted living is a grayer area, because many residents live there for a mix of housing and help with daily tasks. The route to deductibility runs through Internal Revenue Code §7702B(c), which treats "qualified long-term care services" as medical care for purposes of §213.

To qualify, those services must be needed by a chronically ill individual and provided under a plan of care prescribed by a licensed health care practitioner. In addition, the practitioner must have certified the chronic illness within the previous 12 months.

Under the statute, a person is considered chronically ill if either of the following applies:

• Two of six activities of daily living. The person cannot perform at least two of the six ADLs — eating, toileting, transferring, bathing, dressing and continence — without substantial help, and the loss is expected to last at least 90 days.
• Severe cognitive impairment. The person needs substantial supervision to protect them from threats to health and safety because of severe cognitive impairment, such as Alzheimer's disease or another form of dementia.

Either path is enough on its own. Overall, the certification turns what might otherwise look like a housing cost into a medical one, so the letter itself is worth requesting and keeping, not just a verbal confirmation from the care team.

How Much Of The Monthly Fee Counts

Tax professionals differ on how much of an assisted living bill counts. Some treat the full monthly fee as deductible when a certified chronically ill resident lives there mainly for care, while others deduct only the personal-care and nursing portion and treat rent and meals as personal.

An itemized statement from the facility that separates care charges from room and board makes either approach easier to support. Our explainer on assisted living fees covers how communities structure base rent, care levels and add-on charges, and the 2026 assisted living cost guide covers typical ranges.

Memory care often meets the severe cognitive impairment test more easily, because supervision is the main reason the resident is in the unit. Families comparing secure units can find pricing context in our guide to memory care costs.

Care At Home And In The Community

The same §7702B framework applies outside a facility. Wages paid to a home health aide for qualified long-term care services under a plan of care can count as medical expenses, as can qualifying adult day health program fees.

Be aware that hiring an aide directly can create household employer obligations, including payroll taxes. Our breakdown of home health aide costs explains the difference between agency and private-hire arrangements.

When An Adult Child Can Claim A Parent's Costs

The deduction belongs to whoever pays the expense, and only for a person who qualifies as that payer's dependent for medical-expense purposes. This is why the same nursing home invoice can be deductible on one family member's return and not on another's.

For a parent, the relevant category is "qualifying relative." Publication 502 relaxes some of those rules for medical expenses, which opens the door wider than many adult children assume.

Here's how the standard dependency tests compare with the version that applies to the medical expense deduction:

In practice, a parent receiving a pension, Social Security or IRA distributions above the dependency income limit can still be someone whose medical bills an adult child deducts. The support test is the one that decides most cases.

The Support Test In Practice

Total support includes housing, food, clothing, medical care and similar necessities. When a parent is in a facility, the cost of that care is usually the largest part of the total, so the person paying the facility often provides the majority of support.

Keep in mind that the parent's own money spent on their own care counts as support the parent provided. Benefits a state pays on a parent's behalf based on need, such as Medicaid, are generally treated as support from the state — confirm how they apply to your situation with a tax professional.

The payment also has to come from the child. A child who signs checks from the parent's account under a power of attorney is spending the parent's money, not their own; our comparison of guardianship and power of attorney explains that agent role.

Siblings Who Share The Cost

Often, no single child provides more than half of a parent's support, but several do together. In that case, IRS rules allow a multiple support agreement, documented on Form 2120, when the siblings together provide over half and each contributing sibling provides more than 10%.

The siblings choose one of themselves to claim the parent, and the others sign statements agreeing not to. Note that the designated sibling can deduct only the medical expenses that sibling personally paid, which is why some families coordinate so that facility payments run through the designated sibling's account.

How The Deduction Interacts With Medicaid Planning

A child paying a parent's facility bill from the child's own funds is not a transfer by the parent. The Medicaid 5-year lookback examines transfers made by the applicant and spouse, so these payments do not create a penalty on their own.

However, an informal "you'll pay me back later" arrangement can complicate both sides. Repaying a child from the parent's assets without documentation can raise lookback questions, and the IRS may view the payments differently than the family intended.

Paying A Family Caregiver

Families sometimes pay a child under a written personal care agreement. Under §213(d)(11), payments to a relative for qualified long-term care services do not count as medical care unless that relative is a licensed professional for those services.

In addition, the payments are generally taxable income to the child who receives them. For how caregiving children are treated on the Medicaid side, see our explainer on the caregiver child exemption.

Patient Liability And Retroactive Coverage

Once a parent qualifies for Medicaid in a nursing home, most of their monthly income usually goes to the facility as patient liability. That amount is paid by the parent and counts as the parent's own medical expense.

Medicaid can also cover bills from up to three months before the application month in many states. If an expense was deducted in one year and later reimbursed through retroactive Medicaid coverage, Publication 502 generally requires including the reimbursement in income in the year received, to the extent the earlier deduction lowered tax.

Records That Support The Deduction

The deduction depends on documents, and those documents are much easier to collect during the year than to rebuild in April. Here's a list of what tax preparers generally ask to see:

• Chronic-illness certification. A signed statement from a licensed health care practitioner, dated within the past 12 months, describing the ADL losses or cognitive impairment.
• Plan of care. The written plan prescribed by that practitioner, which links the services being paid for to the certified condition.
• Itemized facility statements. Monthly invoices that separate nursing and personal care from room and board, particularly for assisted living.
• Proof of who paid. Canceled checks, bank statements or card records that tie each payment to the family member claiming it.
• Insurance and benefit records. Explanation-of-benefits statements and long-term care insurance payouts, which reduce the deductible amount.

All of these records serve the same purpose: showing what was paid, by whom, and why it counts as medical care. A ledger kept alongside the payments, recording who covered which bill, also helps settle the support test when siblings share costs.

Questions To Bring To A Tax Professional

The right next step depends on where the family is in the process. If a parent is about to enter care, it may help to decide now who will pay the facility directly and to request the practitioner's certification at admission.

If care is already underway, the most useful questions are whether the main reason for the stay is medical, whether a certification letter exists, and whether any one person clears the over-half support test. Families also mid-way through Medicaid planning may want those questions answered alongside an elder-law review, since the tax and benefit rules affect each other.

A CPA or enrolled agent can model the deduction on both the parent's and the child's returns to show where it is worth more. For the Medicaid side of the same decisions, our elder-law attorney directory lists practitioners by state.