Assisted living facilities for elderly persons (“ALFs”) can be very expensive, but for many taxpayers, the cost can be fully deducted on federal income tax returns as a medical expense if the ALF resident’s health problems rise to a certain level and if the appropriate documentation is obtained.

Taxpayers over 65 or who have a spouse over 65 can deduct the portion of their medical and dental expenses that exceed 7.5% of their adjusted gross income. Once one or both spouses move to an assisted living facility, most taxpayers will easily exceed this threshold.