Why
Publication 502 allows the cost of medical care in a nursing home, home for the aged or similar institution. That includes meals and lodging if a principal reason for being there is to get medical care.
If the reason for being there is personal, only the part of the cost that's for medical or nursing care counts.
Qualified long-term care services for a chronically ill person, provided under a plan of care prescribed by a licensed practitioner, also count.
What to keep
- Monthly statements that separate medical or nursing care from room and board.
- A physician's note on why the care is needed.
- The plan of care, for long-term care services.
Watch out for
- Assisted living turns on the same question of purpose, so ask the facility to itemize.
- The expense has to be for you, your spouse or a dependent. A parent counts if they're your dependent, or would be except for their income or a joint return. That usually means you provide over half their support.
If you plan to reimburse yourself later
IRS Notice 2004-50, Q&A 39, sets no deadline, as long as the expense came after your HSA was established and your records show it wasn't paid by another source or deducted on a tax return. See what records the IRS expects and how long to keep them.