Charges
Legacy base fees include your choice of apartment located in our uniquely designed and decorated Legacy community. It also includes a base service plan that can include assistance with medication, showering and dressing in a secure environment. The Legacy is led by a Program Director, and is staffed 24 hours per day by Alzheimer’s certified resident care aides. The program is designed to promote a dignified life for those with memory loss. Included in all levels of care is a day that features structured activities from 8am-8pm to promote reassurance, self worth and well being. All accommodations have emergency response systems and private baths. Base rates start at $5,000 per month. Please contact us for more information.
As care needs increase we can accommodate residents who need help with incontinence, administration of medication and eating. A qualified Nurse will review care levels and work with each families to meet care needs throughout your residency with us.
Additional Care Level Fees
Legacy Plus…………. $30/day in addition to the Legacy base fee
Legacy Max…………. $45/day in addition to the Legacy base fee
The cost of care may be tax deductible. See below:
Tax Deductibility of Assisted Living Services
We have been asked by many residents and family members if their payments to Woodbridge Assisted Living are tax deductible. In many cases, a large portion of the monthly cost for Assisted Living, Alzheimer’s and Skilled Nursing care is in fact tax deductible as a medical expense.
This memo is intended to provide you with a summary of information about the tax treatment of long-term care services. However, please consult your own tax advisor before making decisions regarding tax deductibility of assisted living, Alzheimer’s, and skilled nursing care expenses.
In 1996, Congress passes and the President signed the Health Insurance Portability and Accountability Act (the “HIPAA”). Prior to this law being enacted, the cost of long-term care was deductible only if medical reasons were the primary reason for an individual’s placement in a long-term care facility.
According to the HIPAA, for tax years beginning after 1996, “qualified long-term care services” are deductible from gross income as an itemized deduction. This is subject to the limitation that when added to any other un-reimbursed medical expenses for the years, only that amount that exceeds 7.5% of adjusted gross income is an itemized deduction.
“Qualified long term care services” can include maintenance or personal care services that are required by a chronically ill individual and that are provided pursuant to a plan of care prescribed by a licensed health care practitioner. A “chronically ill individual” includes someone who is unable to perform (without substantial assistance) at least two activities of daily living for at least 90 days (in the future) due to a loss of functional capacity. It also includes someone who requires substantial supervision to protect themselves from threats to health and safety due to severe cognitive impairment.
For assisted living and Alzheimer’s care, the HIPAA now provides some clarity. In order to deduct the care costs, there must be an ADL deficiency or cognitive impairment. In addition, the plan of care must be prescribed by a licensed health care practitioner.
For assisted living facility, such as Woodbridge Assisted Living, that utilize a licensed health care practitioner, i.e. a registered nurse, to help prepare a plan of care in conjunction with the resident’s physician, and for those residents who meet the criteria, it would appear that the entire monthly cost may be deductible.
Depending upon your family’s specific situation eligibility for this deduction may create a substantial tax benefit for residents or their provider. Again, we recommend that you consult with your tax advisor to assist you with your individual situation.
Questions and Answers about Tax Deductibility of Long Term Care Costs
1. Is the assisted living fee paid monthly by resident’s deductible?
The entire cost (including rent, food, services, etc.) related to Assisted Living is deductible if the main reason for being in the Woodbridge Assisted Living community is to receive nursing care.
A resident will be deemed to be in a facility for nursing care if they have been certified by a licensed health care practitioner as unable to perform (without substantial assistance) at least two activities of daily living (ADL’s) (i.e., eating, bathing, dressing, etc.) or who requires substantial supervision to protect the individual from himself for herself because of severe cognitive impairment.
However if the resident’s condition is such that the availability of Assisted Living is not a principal reason for his presence at our community, only the part of the cost related to the nursing care will qualify. In this situation, meals and lodging will not be deductible. For example, if a resident needs assistance with one or fewer activities of daily living and they do not suffer from server cognitive impairment, then he/she could only claim the portion of the annual payment related ton nursing care as a deduction.
2. How do we determine if the main reason for residing in a Woodbridge Assisted Living community is to receive nursing care?
Woodbridge Assisted Living assists residents’ families with documenting the facts. The nurse will be able to provide families with documentation related to their loved one’s ADL needs. Residents in Woodbridge Assisted Living’s enhanced program or Legacy, Plus or Plus-Plus, by definition, would meet these criteria. Residents would generally be in these programs when they were unable to perform at least two ADL’s or required assistance due to severe cognitive impairment. Also, the assessments and care prescriptions performed by our licensed nurses prior to admission will assist residents and their families in documenting to the IRS the need for care.
For residents in our basic Assisted Living program, factual documentation, provided by our licensed nurse, regarding actual care needs will be in their wellness file. Woodbridge Assisted Living can provide a letter at the end of the year with the total amount spent for the year on Assisted Living costs.
3. What portion of my monthly payment is related to Rent, Food and/or Nursing Care?
Since we do not invoice residents separately for rent, food and services we can only provide a general assessment of the breakout of these categories. Bases on our internal analysis, an average of 55% of our fees are related to care services provided to our Assisted Living residents.
4. How does the IRS define “qualified long term care”?
Qualified long term care services are defined as necessary diagnostic, preventative, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill individual and that are provided pursuant to a plan of care prescribed by a licensed health care practitioner.
5. What is the definition of a “chronically ill individual”?
A chronically ill individual is one who has been certified with in the previous 12 months by a licensed health care practitioner as : (1) being unable to perform (without substantial assistance) at least two activities of daily living for at least 90 days (in the future) due to a loss of functional capacity; or (2) requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment; or (3) having a similar level of disability as determined by future regulations to be promulgated by the Secretary of the Treasury.
6. What are activities of daily living?
Activities of daily living are defined as eating, toileting, transferring, bathing, dressing and continence.
7. My family member is physically capable of bathing and dressing on their own, however, they suffer from dementia and require some oversight. Would their monthly fee be tax deductible?
Yes, a portion of their monthly fee would be tax deductible. The Congressional Conference Committee report indicates that those individuals with cognitive impairment such as Alzheimer’s disease, but who are physically able, should be treated similarly to an individual who is unable to perform (without substantial assistance) at least two activities of daily living.
8. My mother is living in the skilled nursing unit. I am assuming that her total monthly fee is tax deductible.
Yes. This is correct as long as she is unable to perform two activities of daily living.
We hope this information is helpful. Should you have further questions on these issues, please seek the advice of a qualified tax planer or financial advisor.