Chronically Ill Individual (Tax Definition)

What is the IRS Definition of a Chronically Ill Individual for Tax Purposes?

For tax purposes, a chronically ill individual is someone who cannot perform at least two of six daily living activities independently for 90+ days, or requires substantial supervision due to severe cognitive impairment, qualifying them for special medical and long-term care tax benefits.
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A chronically ill individual, according to the IRS, is a person with significant health limitations that qualify them for special tax relief related to medical expenses and long-term care. This status primarily applies to those who need ongoing help with everyday tasks or require supervision because of serious cognitive issues like dementia. Understanding this classification is crucial for taxpayers looking to claim deductions or benefits associated with long-term care.

IRS Definition and Criteria

The IRS defines a chronically ill individual as someone who meets at least one of the following conditions:

  • Inability to perform at least two Activities of Daily Living (ADLs) without assistance for 90 consecutive days or longer. The six ADLs are eating, toileting, transferring (e.g., moving from a bed to a chair), bathing, dressing, and maintaining continence.
  • Requirement of substantial supervision due to severe cognitive impairment. This includes disorders like Alzheimer’s disease or other dementias where supervision is necessary to prevent harm.

This definition is outlined in IRS Publication 907 and aligns with criteria used in long-term care insurance and certain government healthcare programs, but specifically for tax deduction and credit purposes.

Why This Definition Matters

Meeting the IRS criteria for a chronically ill individual enables taxpayers or their caregivers to deduct qualified medical and long-term care expenses on their tax returns. These deductions can significantly reduce the financial burden of chronic illness-related care costs.

Examples

  • Joan cannot dress or bathe herself due to advanced arthritis and has needed help for several months. She qualifies as chronically ill.
  • Mark requires constant supervision because of severe dementia, meeting the cognitive impairment standard.
  • Sarah, who has diabetes but manages all ADLs independently, does not qualify.

Documentation Requirements

To claim these tax benefits, taxpayers must obtain certification from a licensed healthcare professional confirming the chronic illness and need for assistance or supervision. This documentation is critical for IRS compliance.

Related Tax Benefits and Expenses

Qualified long-term care services and certain medical expenses related to chronic illness may be deductible if they exceed 7.5% of adjusted gross income (AGI) as outlined in IRS Publication 502. Understanding what counts as qualified expenses is essential.

Tips for Taxpayers

  • Maintain detailed medical records and certifications regarding your health status.
  • Track expenses carefully, including home care costs, medical equipment, and insurance premiums related to long-term care.
  • Consult resources like IRS Publication 502 and Publication 907 for detailed guidance.
  • Consider consulting a tax professional experienced in medical and long-term care deductions.

Common Misconceptions

  • All chronic illnesses qualify: Only those meeting IRS-defined functional or cognitive impairment standards qualify.
  • No proof is needed: IRS requires official certification for qualification.
  • Only the elderly qualify: Anyone with qualifying impairments can meet the criteria regardless of age.

Additional Resources

Explore related topics for a deeper understanding:

Summary Table

Criteria Details
Activities of Daily Living (ADLs) Unable to perform at least 2 of 6 ADLs for 90+ days
ADLs Include Eating, bathing, dressing, toileting, transferring, continence
Cognitive Impairment Requires substantial supervision due to severe impairment
Documentation Needed Certification by licensed healthcare practitioner
Relevant IRS Publications IRS Publication 502 and Publication 907

Authoritative Sources

Understanding the IRS definition of a chronically ill individual helps taxpayers access valuable tax deductions connected to long-term care and medical expenses, alleviating some financial challenges linked to chronic health conditions.

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