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Nursing Home and Taxes
Old 08-09-2019, 11:44 AM   #1
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Nursing Home and Taxes

How will being in a nursing home change your tax situation? Say your nursing home cost is $75k per year. Assume your spouse continues to live in your home. Do you have the nursing home cost plus your normal house expenses? Is any part of the nursing cost deductible? My pension and SS are not enough to cover the nursing care. Currently withholding $1200/month for Federal and State taxes. Then anything I take from IRA will have to have taxes withheld as well. No LTC. Trying to look at potential scenarios. Does Medicare plus Medigap cover any of this? Looks pretty gloomy. My Gma spent 14 years in a home.
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Old 08-09-2019, 11:51 AM   #2
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Each state is different and some have laws that prevent the other spouse from being impoverished. Once assets are spent down to 2k then Medicaid kicks in if you apply for it. Generally people can stay in their homes until the other spouse dies or goes into a home. You need to look at laws pertaining to your state.
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Old 08-09-2019, 11:55 AM   #3
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How will being in a nursing home change your tax situation? Say your nursing home cost is $75k per year. Assume your spouse continues to live in your home. Do you have the nursing home cost plus your normal house expenses? Is any part of the nursing cost deductible? My pension and SS are not enough to cover the nursing care. Currently withholding $1200/month for Federal and State taxes. Then anything I take from IRA will have to have taxes withheld as well. No LTC. Trying to look at potential scenarios. Does Medicare plus Medigap cover any of this? Looks pretty gloomy. My Gma spent 14 years in a home.
Nursing home costs generally fall under deductible medical expenses. A large chunk should.
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Old 08-09-2019, 11:58 AM   #4
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When my mom was in for a couple of years, 100% of hers was tax deductible because she couldn't feed or dress herself, walk, and she had Alzheimer's. I don't remember the term, but it was something about "life skills" or something like that. So, it was nice to not have to worry about taxes since her nursing home cost more than their income.

My dad passed and we sold the house, so I don't know much about the spouse becoming impoverished. You may want to consult an elder care lawyer. And some of the bigger nursing homes have someone on staff that can help with financial issues.

Good luck to you.
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Old 08-09-2019, 12:11 PM   #5
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How will being in a nursing home change your tax situation? Say your nursing home cost is $75k per year. Assume your spouse continues to live in your home. Do you have the nursing home cost plus your normal house expenses? Is any part of the nursing cost deductible? My pension and SS are not enough to cover the nursing care. Currently withholding $1200/month for Federal and State taxes. Then anything I take from IRA will have to have taxes withheld as well. No LTC. Trying to look at potential scenarios. Does Medicare plus Medigap cover any of this? Looks pretty gloomy. My Gma spent 14 years in a home.
Medicare covers skilled nursing facility charges up to 100 days, and MediGap covers your copay for those charges, as long as the stay is preceded by hospitalization. Neither will pay for continuous residence in a nursing home or assisted living. Medicare / MediGap will cover medical expenses while living in a facility, such as physician visit, physical therapy - the same health care coverage one has while living at home.

The entire cost of nursing home or assisted living care is an eligible medical expense that is tax deductible.
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Old 08-09-2019, 12:26 PM   #6
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Medicare covers skilled nursing facility charges up to 100 days, and MediGap covers your copay for those charges, as long as the stay is preceded by hospitalization. Neither will pay for continuous residence in a nursing home or assisted living. Medicare / MediGap will cover medical expenses while living in a facility, such as physician visit, physical therapy - the same health care coverage one has while living at home.

The entire cost of nursing home or assisted living care is an eligible medical expense that is tax deductible.

But Medicaid may pay for it, depending on your state, although IME the quality of care is much better if you can private pay: https://www.nolo.com/legal-encyclope...ed-living.html
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Old 08-09-2019, 12:42 PM   #7
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https://assets.aarp.org/rgcenter/ppi...ss_revised.pdf

page 22 has table by state, for example Illinois allows $109,500 in assets held by the spouse not including the home that the spouse lives in and a certain income.
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Old 08-09-2019, 12:55 PM   #8
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But Medicaid may pay for it, depending on your state, although IME the quality of care is much better if you can private pay: https://www.nolo.com/legal-encyclope...ed-living.html
This also varies state to state. My brother was private pay in a SNF and his therapists were begging me to get him on Medicaid (called MassHealth in Mass). "We could do so much more for him than what he's paying for".
Unbelievably there are limits on what you can self pay for therapy...in our state Medicaid allows somewhat more.
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Old 08-09-2019, 12:59 PM   #9
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This also varies state to state. My brother was private pay in a SNF and his therapists were begging me to get him on Medicaid (called MassHealth in Mass). "We could do so much more for him than what he's paying for".

Yes, in addition to capjak's link, there's a link in my article. Nolo has a page dedicated to some state Medicaid requirements for LTC.
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Old 08-09-2019, 01:25 PM   #10
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Thanks for the great responses. A little background: I am currently living at home. Steps upstairs are becoming more of a problem, wife wants to keep home. She doesn't want to sell family home to move to a single level home. I'm kinda at a loss on how to proceed: rent a single level apt, continue until I can't navigate steps,
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Old 08-09-2019, 01:29 PM   #11
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Idnar7, tough choice when DW refuses to move. Is there any space on first floor to have a daybed, pull-out sofa or other sleeping space for you if it comes to that?
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Old 08-09-2019, 01:32 PM   #12
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I don't know about your state, check with your accountant; but Federally, in 2019, you can deduct any medical expenses that exceed 10% of your AGI.
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Old 08-09-2019, 01:34 PM   #13
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Thanks for the great responses. A little background: I am currently living at home. Steps upstairs are becoming more of a problem, wife wants to keep home. She doesn't want to sell family home to move to a single level home. I'm kinda at a loss on how to proceed: rent a single level apt, continue until I can't navigate steps,
I have witnessed some bad results from steps in homes...

My mom now 6 years in a nursing home after falling down the stairs and subsequent stroke.....

An older friend getting up in middle of night to go to the bathroom....wife finds him at bottom of stairs.....he did not survive the fall....

FIL same as older friend fell down stairs ended up with broken vertebrae and a screw in his neck...
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Old 08-09-2019, 01:42 PM   #14
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Thanks for the great responses. A little background: I am currently living at home. Steps upstairs are becoming more of a problem, wife wants to keep home. She doesn't want to sell family home to move to a single level home. I'm kinda at a loss on how to proceed: rent a single level apt, continue until I can't navigate steps,
I can't imagine not being concerned about my spouse's ability to navigate our home. My FIL is the same way, with my SMIL.

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Idnar7, tough choice when DW refuses to move. Is there any space on first floor to have a daybed, pull-out sofa or other sleeping space for you if it comes to that?
Good suggestion. We bought a day bed for my grandmother to use when she visited with us over the weekend.

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I have witnessed some bad results from steps in homes...

My mom now 6 years in a nursing home after falling down the stairs and subsequent stroke.....

An older friend getting up in middle of night to go to the bathroom....wife finds him at bottom of stairs.....he did not survive the fall....

FIL same as older friend fell down stairs ended up with broken vertebrae and a screw in his neck...
Idnar7, can you show your wife the above post?
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Old 08-09-2019, 03:06 PM   #15
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Thanks for the great responses. A little background: I am currently living at home. Steps upstairs are becoming more of a problem, wife wants to keep home. She doesn't want to sell family home to move to a single level home. I'm kinda at a loss on how to proceed: rent a single level apt, continue until I can't navigate steps,
Why not look into those stair climbing seats along with the potential of getting a PCA. "Aging in Place" is the new mantra with PCA's in high demand. Sure cheaper than a nursing home.
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Old 08-09-2019, 03:11 PM   #16
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Why not look into those stair climbing seats along with the potential of getting a PCA. "Aging in Place" is the new mantra with PCA's in high demand. Sure cheaper than a nursing home.
PCA?

I tried to Google. Got Porsche Club of America. Pretty sure that is not correct .
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Old 08-09-2019, 03:14 PM   #17
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PCA?

I tried to Google. Got Porsche Club of America. Pretty sure that is not correct .
Personal Care Assistant. Sorry, I'm too close to this subject at this time.
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Old 08-09-2019, 03:16 PM   #18
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Personal Care Assistant. Sorry, I'm too close to this subject at this time.
Got it. Thought was something like that.
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Old 08-09-2019, 03:49 PM   #19
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Thanks for the responses. This is not immediate issue. Just trying to look at future options. I have had Type 2 Diabetes for 15+ years and have issues with legs and balance. Plus had foot surgery last year. Currently can go up and down stairs with a cane. Had three falls (not on stairs) last winter indoors. We talked about converting a closet into a shower, but cost was prohibitive, plus would not help the value of the house. Might consider a cheap motel for sleep and shower if handicapped equipped. Just concerned with the cost of a nursing home plus house and wondering if there was any tax relief of a nursing home. My cousin had a stair lift and that was a great option. That might the next step. At least it addresses the steps and shower issue. Wife, while only two years younger, is as active as a teenager. She runs the steps.


Appreciate the feedback and will take it all in.
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Old 08-09-2019, 03:49 PM   #20
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Thanks for the great responses. A little background: I am currently living at home. Steps upstairs are becoming more of a problem, wife wants to keep home. She doesn't want to sell family home to move to a single level home. I'm kinda at a loss on how to proceed: rent a single level apt, continue until I can't navigate steps,

This makes me sad...does your wife tell you her reasons behind her stance.? It doesn't make any sense.
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