Memory care facility costs are generally tax deductible as a medical expense, but how much you can deduct depends on why the person is living there. If the primary reason for residence is medical care, which is almost always the case with memory care, the full cost including room and board is deductible. You can only deduct the portion of total medical expenses that exceeds 7.5% of your adjusted gross income (AGI), and you must itemize deductions on Schedule A to claim it.
Why Memory Care Typically Qualifies
The IRS allows deductions for “qualified long-term care services,” which includes care for anyone classified as a chronically ill individual. To meet that definition under federal tax law, a licensed health care practitioner must certify that the person meets at least one of three criteria: they cannot perform at least two activities of daily living without substantial help for a period of at least 90 days, they have an equivalent level of disability, or they require substantial supervision to protect them from threats to health and safety due to severe cognitive impairment.
That third category, severe cognitive impairment, is exactly what memory care facilities are designed to address. Conditions like Alzheimer’s disease and other forms of dementia fit squarely within this definition. Because residents in memory care need constant supervision to stay safe, the medical purpose of the facility is rarely in question.
Full Cost vs. Medical Portion Only
This distinction matters a lot for your tax bill. The IRS draws a clear line: if someone is in a facility primarily for medical care, the entire cost is deductible, including meals and lodging. If the person is there primarily for non-medical reasons, only the portion that covers actual medical care qualifies.
For memory care residents, the “primarily for medical care” standard is usually straightforward to meet. These facilities exist specifically to provide medically necessary supervision and care for people with cognitive impairment. That means the full monthly bill, covering the room, meals, personal care, medication management, and specialized programming, can count as a medical expense. This is a significant advantage over assisted living facilities where some residents may be there partly for convenience or social reasons, making it harder to claim the full amount.
The 7.5% AGI Threshold
Even when memory care costs qualify as medical expenses, you cannot deduct the first dollar. The IRS only allows you to deduct medical expenses that exceed 7.5% of your adjusted gross income. This threshold applies for both the 2024 and 2025 tax years.
Here’s how that works in practice. If your AGI is $60,000, the first $4,500 of medical expenses (7.5% of $60,000) is not deductible. If your total qualifying medical expenses for the year are $80,000, you could deduct $75,500. Given that memory care facilities often cost $5,000 to $10,000 or more per month, most families paying these bills will clear the 7.5% floor quickly, making a large portion of the expense deductible.
You also need to subtract any amounts covered by insurance or other reimbursements. Only out-of-pocket costs count.
Claiming a Parent’s Memory Care Costs
You don’t have to be the patient to claim the deduction. The IRS allows you to deduct medical expenses you pay for yourself, your spouse, or a dependent. Many adult children paying for a parent’s memory care can take advantage of this, but the parent must qualify as your dependent for tax purposes.
To claim a parent as a dependent, you generally need to provide more than half of their financial support for the year. The parent’s gross income must also fall below the annual exemption amount, though Social Security benefits are often excluded from this calculation. If siblings are splitting the cost, only the one who provides more than half the support can claim the dependent, or you can use a multiple support agreement (IRS Form 2120) where one sibling claims the deduction and the others agree not to.
What You Need to Document
The most important piece of documentation is a certification from a licensed health care practitioner confirming that the person meets the definition of chronically ill. For memory care, this typically means a letter stating the individual requires substantial supervision due to severe cognitive impairment. This certification needs to be renewed periodically, generally within the previous 12 months.
Beyond the medical certification, keep records of every payment you make to the facility. Save monthly invoices, receipts, and bank or credit card statements showing the amounts paid. If the facility breaks out medical and non-medical charges separately on its billing, hold onto those itemized statements. You should also retain any documentation showing that insurance or other benefits did not reimburse the expenses you’re claiming.
Entrance Fees and One-Time Costs
Some memory care communities charge a one-time entrance fee or community fee in addition to monthly costs. The deductibility of these fees follows the same principle: if the fee is connected to medical care, it can qualify. Many continuing care retirement communities allocate a specific percentage of the entrance fee to medical care, and that portion is deductible. Ask the facility for a written statement showing what percentage of the entrance fee is attributable to medical services. If the facility is primarily providing medical care, the full entrance fee may qualify.
How to Claim the Deduction
Memory care costs are claimed as an itemized deduction on Schedule A of Form 1040, under medical and dental expenses. This means you cannot take the standard deduction and claim memory care costs at the same time. For many families, memory care expenses alone are large enough to make itemizing worthwhile, even if their other deductions are modest.
Add up all qualifying medical expenses for the year, not just memory care. Prescription medications, doctor visits, dental work, and other out-of-pocket medical costs all count toward the total. Subtract 7.5% of your AGI, and the remainder is your deduction. If you’re paying for a parent’s care and also have your own medical expenses, both can be combined on the same return as long as the parent qualifies as your dependent.