A new year brings exciting opportunities, and it also happens to be one of the most strategic windows of time for seniors to consider transitioning to a local senior living community. In addition to perks like social connection, safety, and maintenance-free living, your family may also discover a treasure trove of financial benefits under current tax laws.
Tax Considerations for 2025-2026
Tax Breaks for Moving Expenses When Health-Related
While traditional moving expenses are no longer deductible for most taxpayers, some seniors can still qualify for deductions when a move is medically necessary. If your move to assisted living or a supportive community is recommended by a licensed healthcare provider for health or safety reasons, portions of the moving costs may be considered medical expenses.
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Always keep detailed documentation of all medical-related moving costs.
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Ask your physician for written confirmation if your move is medically recommended.
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As tax laws continue to shift, be sure to confirm with a tax professional whether itemizing deductions benefits you for the 2025–2026 filing years.
Medical Expense Deductions
Medical expenses remain one of the most significant tax deduction opportunities for seniors.
For 2026, the IRS continues to allow deductions for qualified medical expenses that exceed 7.5% of adjusted gross income (AGI) (the current threshold unless changed in upcoming IRS announcements).
Eligible deductions may include:
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Assisted living costs tied to medical care
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Meals and lodging if a resident is in a community primarily for medical care
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Fees for nursing assistance
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Transportation to medical appointments
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Long-term care services meeting IRS requirements
These deductions can substantially reduce taxable income, especially for seniors with ongoing care needs.
Deductions for Care Services, If Criteria Are Met
Many seniors entering assisted living or memory care may qualify for additional deductions, depending on the level of care required.
To qualify:
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A licensed healthcare professional must certify that the senior needs assistance with at least two
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Activities of Daily Living (ADLs) or
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Requires continuous supervision due to cognitive impairment (such as, Alzheimer’s or dementia)
ADLs include:
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Eating
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Bathing
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Dressing
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Transferring
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Continence care
If these criteria are met, certain personal care services may be deductible as medical expenses.
Financial Benefits of Selling a Home in 2026
A home sale timed before year’s end can unlock valuable tax advantages under currently active IRS rules. Potential benefits include:
Mortgage Interest Deduction
You may still deduct mortgage interest paid on your former primary residence for the portion of the year you owned the home, depending on whether you itemize.
Capital Gains Exclusion for 2025 (No Scheduled Changes for 2026)
Seniors selling their home can typically exclude up to:
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$250,000 in capital gains for individuals
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$500,000 for married couples filing jointly
The home must have been your primary residence for 2 of the last 5 years prior to the sale.
Property Tax Deduction
You may be able to deduct state and local property taxes paid on your home for the portion of the year before selling, subject to the current $10,000 SALT deduction cap (still in effect for 2026 unless Congress revises it).
A Smart Time For Seniors to Move, Financially and Personally
While our senior living financial team at The Arbor Company can’t provide the tax advice that professionals in the tax industry can, we can help connect you with trusted local professionals who will guide you through the financial side of the transition, ensuring you’re taking advantage of every opportunity available in 2026 and beyond.
Moving into senior living this year could provide the real financial relief you’ve been waiting for, as well as long-term clarity that you’ve found the perfect senior living community to begin your next chapter.
