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Eldercare Home Modifications May Be Tax Deductible

Most elderly and infirm individuals would prefer to live in a familiar home environment rather than a hospital or long-term care facility. Being cared for by trusted family members helps patients continue to feel connected to the world and have some measure of control over their day-to-day life. Being responsible for the well-being of another person is no small task, however. Aside from the patience and emotional resiliency necessary to care for a loved one, the task can also be logistically problematic, as most people don’t design or select their homes with future medical needs in mind. Often, a caregiver’s property requires modifications, such as the addition of an entrance ramp, to achieve maximum safety and function. Making such changes to a home can be expensive—but thankfully, there are ways to make eldercare more affordable.

Certain home modification costs are considered deductible medical expenses, and this designation could reduce the caregiver’s financial burden. Only modifications that assist with medical care without increasing the value of the property can be fully deducted—any change that increases the caregiver’s property value may be subject to a partial deduction.

Some modifications that may assist caregivers without increasing property value are:

  • Adding handrails, railings, or grab bars
  • Installing porch lifts
  • Constructing ramps
  • Grading the property to improve accessibility
  • Lowering cabinets and counters
  • Widening doorways and modifying door hardware
  • Making adjustments to fire alarms and other warning systems

Deductions must be itemized in order for caregivers to be eligible for tax deductions for these medically necessary installations. Deductible medical expenses are limited to those that exceed 7.5% of your adjusted gross income for the year, or 10% if you are subject to the alternative minimum tax.

Home eldercare is the right choice for many families, and it doesn’t have to come with long-lasting debt. Deducting medically necessary home modification expenses from your taxes can help your home better suit your caregiving needs without breaking the bank.