RI Increases Tax for Nursing Home Residents

In tax year 2011 RI has eliminated the itemized deduction allowing a standard deduction of $7,500 for a single individual. The good news is that taxpayers can still itemize nursing home cost on their federal return, but this cost cannot be carried over to the RI state return. Only a $7,500 standard deduction can be taken. The nursing home resident can incur nursing home cost of $50,000 to upwards of $80,000/ year. All of this cost is disallowed as a deduction. This will produce an unfair tax burden of thousands of dollars on the state’s most vulnerable citizens the elderly. For advice and assistance with this issue please contact John Nakowicz, CPA 401-780-9530.