What Is the IRS Definition of Chronically Ill?

The IRS provides specific guidelines for determining whether an individual is considered chronically ill, which can impact tax deductions and the use of tax-advantaged accounts for medical expenses. Understanding these requirements helps individuals and caregivers properly document eligibility and maximize tax benefits.

IRS Criteria for Chronically Ill

The IRS defines a chronically ill individual based on functional limitations and cognitive impairments. This determination is based on an individual’s ability to perform daily tasks, the need for supervision, and the expected duration of impairment.

Inability to Perform Daily Activities

A person is considered chronically ill if they cannot perform at least two Activities of Daily Living (ADLs) without substantial assistance. ADLs include eating, bathing, dressing, toileting, transferring (such as moving from a bed to a chair), and maintaining continence. The condition must be expected to last at least 90 consecutive days.

Assistance can include physical help, verbal reminders, or standby support to ensure safety. This standard aligns with IRS guidelines and is also used by long-term care insurance providers to determine benefit eligibility under tax-qualified policies.

Supervision Requirement

Individuals who require continuous supervision due to cognitive impairments also qualify as chronically ill. This applies to conditions such as Alzheimer’s disease, dementia, or other neurological disorders that impact memory, reasoning, or judgment. The key factor is whether the individual would be at risk if left unsupervised.

Supervision can be provided at home or in a care facility. While physical limitations are assessed based on ADLs, cognitive impairments are evaluated based on their effect on decision-making and independent functioning. A healthcare provider must document the need for supervision due to a diagnosed cognitive condition.

Duration of Condition

To qualify under IRS rules, the impairment must be expected to last at least 90 consecutive days. This distinguishes chronic conditions from short-term illnesses or temporary disabilities. Medical records, care plans, or statements from healthcare providers are typically required to verify the expected length of impairment. Proper documentation ensures eligibility for tax deductions or exclusions related to long-term care expenses.

Healthcare Practitioner Certification

A licensed healthcare professional must certify that an individual meets the IRS definition of chronically ill. This certification is typically provided by a physician, registered nurse, or licensed social worker who evaluates the condition and confirms the need for ongoing care.

The certification process includes a physical examination, cognitive assessments, and a review of medical history. Healthcare practitioners must document the impairment and confirm that it meets IRS requirements. They may also develop a care plan outlining necessary services, which serves as an official record for tax purposes. Without this certification, tax deductions or exclusions for long-term care expenses may be denied.

Qualifying Long-Term Care Services

To be eligible for tax benefits, long-term care services must be necessary due to the individual’s condition and provided under a formal care plan prescribed by a qualified healthcare practitioner. These services can be delivered in private residences, assisted living facilities, or nursing homes.

Eligible services include personal and custodial care that supports daily living, such as mobility assistance, medication management, and specialized therapies. For example, a person with Parkinson’s disease may require physical therapy to maintain motor function, while someone with advanced arthritis might need help with meal preparation and household tasks.

Certain long-term care insurance policies may also qualify for tax deductions if they meet IRS criteria for tax-qualified plans. These policies typically cover services such as home health aides and skilled nursing care. The amount of premiums that can be deducted depends on the individual’s age and is subject to annual IRS limits, which are adjusted for inflation.