Assisted living, memory care and in-home help can carry tax benefits. Here is how San Diego families check eligibility and find free tax help.
By Patricia Nguyen, CDP · October 18, 2026
Many San Diego families pay thousands of dollars a month for assisted living, memory care or in-home caregivers without realizing some of that spending may be tax-deductible or may qualify for a credit. The rules are technical and depend on who pays, who the care is for, and why the care is needed, so it is worth a conversation with a tax professional before you file. This article is general information, not tax advice.
The two federal tools families most often ask about are the medical expense deduction and the Credit for Child and Dependent Care Expenses. A third, less known piece is how a parent's care costs interact with whether you can claim that parent as a dependent. Each has its own tests, and they do not always apply to the same family.
If you itemize deductions, you can generally deduct unreimbursed medical expenses that exceed 7.5 percent of your adjusted gross income. That threshold is high, which is why the deduction helps most when a large year of care costs lands on a modest income, for example a retired parent paying for memory care out of Social Security and savings.
Long-term care can count as a medical expense when a licensed health care practitioner certifies that the person is chronically ill, meaning unable to perform at least two activities of daily living such as bathing, dressing or toileting for at least 90 days, or needs substantial supervision because of cognitive impairment, and a plan of care is in place. When those conditions are met, the cost of qualified long-term care services can be deductible, and in some cases a portion of an assisted living or memory care bill that is attributable to medical and personal care, rather than room and board, may qualify. Ask the community's business office for an itemized statement that separates care charges from housing and meals.
Medicare premiums, Medigap premiums, dental and vision costs, hearing aids, and qualifying long-term care insurance premiums, subject to age-based limits, may also count toward the threshold. Keep every receipt and the physician's certification in one folder. If you pay for a parent's care and claim them as a dependent, or they would qualify as your dependent except for income, you may be able to include what you paid in your own medical expenses.
The dependent care credit can apply when you pay for care so that you can work or look for work, and the person receiving care lives with you more than half the year and cannot care for themselves. This often fits adult day programs and some in-home help for a parent who lives in your household. The credit is a percentage of eligible expenses up to a cap, and it phases down with income. The caregiver generally cannot be your spouse or your child under 19, and you must report the caregiver's name and taxpayer identification number.
If you hire a caregiver directly, you may become a household employer with payroll tax obligations once you pay over the annual threshold. Families who skip this step can face penalties later. San Diego County's In-Home Supportive Services program handles payroll for eligible recipients, which is one reason many families look at IHSS first. Our IHSS application guide explains how to apply through the county.
Free tax preparation is available in San Diego County through IRS Volunteer Income Tax Assistance sites and AARP Tax-Aide, typically open during filing season at libraries and senior centers. These volunteers can handle many senior returns but may refer complex itemizing questions to a paid preparer. Calling 2-1-1 San Diego can point you to current locations.
The Aging and Independence Services office, the county's Area Agency on Aging, can connect families with benefits counseling at 800-339-4661. California also offers programs worth asking about, including the Property Tax Postponement program for eligible homeowners age 62 and older and the renter's credit for qualifying lower-income residents. California does not tax Social Security benefits, but other retirement income may be taxable, so do not assume a parent owes nothing.
Whatever you pay in care, confirm that the facility is licensed. You can look up Residential Care Facilities for the Elderly and their inspection history through the California Community Care Licensing Division at ccld.dss.ca.gov before you sign an admission agreement.
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