Life Care & Tax Deduction Information - Glen Arden in Orange County, NY

Life Care is a contract that allows you to plan for having long-term care in the future, should you need it, at a predictable cost. Although you may live independently now and cannot predict what type of care you will need in the future, having a Life Care contract means that no matter what level of care you will eventually need, you will have it at the same monthly fee. A Life Care contract requires a one-time entrance fee, as well as monthly fees, that are potentially tax deductible. Many people don’t know this and miss out on saving some money.

How it Works

The part of the entrance fee that is expected to go towards health care costs is considered tax deductible according to the IRS. This logic also applies to the part of the monthly fee that go toward health care. If the portion of the monthly fee that go toward the costs of health care exceeds $7,500 or more for the year, then it meets the qualifications for taking a medical deduction, meaning this portion is also tax deductible. Prospects are advised to consult with a financial advisor to determine the best way to go about claiming a CCRC-related tax deduction.

If you decide not to live in a Continued Care Retirement Community, a percentage of your entrance fee can be refunded in most cases. If this happens, or if your heirs receive a percentage of the fee refunded as a result of your passing, only the portion that was not returned to you or your estate can be tax deductible.

Glen Arden is Orange County, New York’s premier continuing care retirement community. Learn more about what makes us one of New York’s top Life Care retirement communities.