These days, I hear a lot about people renovating their parents' homes. Some are looking into stair lifts after experiencing a near fall, while others are planning to remove bathtubs and switch to walk-in showers.

However, when they receive estimates, the numbers can be quite high. So everyone seems to ask the same question: "This is deductible as a medical expense, right?"

To put it simply, it can be. However, there are quite a few conditions, so if you jump into renovations thinking "I've heard it can be done," you might end up disappointed later.

Today, I will break down those conditions based on IRS Publication 502. Just a heads up, the latest version available now is for 2025 filings, so details may change in the 2026 edition.

First, the IRS considers the costs of home repairs as capital expenses. The basic principle is that if the primary purpose is medical necessity, it can be included as a medical expense.

The key factor is how much the home's value has increased. If the renovations did not increase the home's value at all, you can count the entire renovation cost as a medical expense.

Conversely, if the home's value has increased, only the difference after deducting the increase from the renovation cost can be counted as a medical expense. If the home's value has increased beyond the renovation cost, there will be nothing to deduct.

Fortunately, the IRS has a separate list of renovations that "typically do not increase home value." This includes installing ramps, widening doors and hallways, bathroom modifications, installing handrails and grab bars, and lowering kitchen cabinets.

What about stair lifts? The term "stair lift" does not appear directly in Pub 502. Instead, it includes porch lifts and "other types of lifts" in the same list.

One thing to be cautious about is elevators. The IRS specifically states that elevators generally increase home value. Therefore, whether it's a lift or an elevator can significantly change the calculations.

The scope of bathroom modifications is also important. Adding grab bars and removing thresholds fits well within the list, but if you're constructing a new bathroom on the first floor, it is more likely to be seen as increasing the home's value.

Additionally, only reasonable costs are recognized. If you spend extra money for aesthetic reasons, like using expensive tiles, that cost is not considered a medical expense.

It's not just installation costs either. Operation and upkeep costs, such as electricity for the lift or regular maintenance fees, can also be counted as medical expenses if the primary purpose is medical. This applies even if the installation costs are not deductible.

Now we reach a critical point. Medical expense deductions can only be claimed if you itemize on Schedule A. If you take the standard deduction, these renovation costs will have no impact on your taxes.

Moreover, only the portion of medical expenses that exceeds 7.5% of your AGI is deductible. If your AGI is $100,000, then $7,500 is essentially lost.

The standard deduction for 2026 is $32,200 for married couples filing jointly. If you're over 65, there's an additional $1,650 per spouse. You need to exceed this total when combining medical expenses and other deductions for itemizing to make sense.

Honestly, seeing these numbers was a bit disheartening. Many homes may not be able to cross that threshold with just a lift. However, if there are significant surgery or care expenses in the same year, the situation could change.

As a side note, starting in 2025, there will be a new senior deduction of $6,000 per person for those over 65, which can be claimed regardless of whether you itemize, so you can think of it separately from the medical expense deduction.

So, if a child pays for these expenses, who gets to claim the deduction? The principle is that the person who pays can only include medical expenses for themselves, their spouse, or their dependents.

To claim parents as dependents, the child must cover more than half of their total living expenses. As of 2025, there is also a condition that the parents' total income must be below $5,200.

However, there is a hidden exception for medical expense deductions. If the parents cannot be claimed as dependents solely due to income conditions, the medical expenses paid by the child can be included in the child's medical expenses.

If siblings share living expenses, there is a method called a multiple support agreement. However, if the renovation costs are split among several siblings, it could lead to a situation where no one can claim the deduction properly, so it's better to decide who will pay first.

Make sure to gather your documents in advance. Keep a doctor's note explaining why the renovation is necessary, and if it's a renovation that could significantly increase the home's value, getting an appraisal is a safe move.

When receiving estimates and receipts, make sure to separate the medical purpose portion from the regular remodeling portion. This will make the biggest difference when calculating later.

In my opinion, these costs are an area that needs more direct support than tax deductions. Ensuring that parents can live safely at home ultimately helps reduce nursing home costs.

If it were me, I would first get a doctor's note before the renovations, roughly tally up how much other medical expenses will be this year, and if it seems possible to itemize, I would proceed with everything in that same year.

The outcome can vary significantly depending on the parents' income, who pays, and whose name is on the house. Since it depends on personal circumstances, I recommend checking with a CPA or tax professional before proceeding.

Whether or not you can claim a deduction, it's essential to address these issues before your parents fall. Just remember that if you're going to spend the same amount of money, you can potentially get some back by planning the order of expenses wisely.