Are Home Modifications Tax Deductible? What the IRS Says

Yes, some of them. When the main purpose of the work is medical care, the IRS lets you count it as a medical expense. The rules are specific, and this post walks through them in plain English so you know what to ask your tax preparer.

This is general information, not tax advice. Whether it applies to you depends on your income, whether you itemize, and who paid for the work. Confirm everything here with your tax preparer or a CPA.

The work has to be for medical care, not comfort

The IRS allows the cost of a home improvement when its main purpose is medical care for you, your spouse, or a dependent. The change has to be made because of a medical condition or disability — not for comfort, convenience, or resale value.

Common examples are a wheelchair ramp at the front door, grab bars and a roll-in shower in an accessible bathroom, wider doorways, and a stairlift for someone who can no longer climb stairs safely. These appear in IRS Publication 502, Medical and Dental Expenses.

Get a doctor's letter before the work starts

A written recommendation from a doctor is the clearest proof the work was medically necessary. Ask your physician, physical therapist, or occupational therapist for a short letter naming the condition and the specific modification — a zero-entry shower after a hip replacement, say, or a ramp for a wheelchair.

If your parent is coming home from the hospital or rehab, the discharge planner can usually help with this. Get it before the work begins if you can; a letter written afterward is harder to rely on.

Ramps and grab bars usually count in full. Elevators usually do not.

This is the part that trips people up. If a modification permanently raises the value of your home, you can only count the amount above that increase. If it does not raise the value, the full cost can count.

Publication 502 lists these as improvements that generally do not increase a home's value, so the full cost is usually allowed:

• Constructing entrance or exit ramps

• Widening doorways at entrances and exits

• Widening or modifying hallways and interior doorways

• Installing railings, support bars, or other modifications to bathrooms

• Lowering or modifying kitchen cabinets and equipment

• Modifying stairways

• Adding handrails or grab bars anywhere

• Modifying door hardware, such as lever handles

• Installing porch lifts and other forms of lifts

• Grading the ground to provide access to the residence

That list is worth reading twice, because porch lifts are on it and elevators are not. Publication 502 says plainly that elevators generally add value to the house. So for a home elevator, only the cost above the increase in your home's value can count. The IRS puts it this way: the cost of the improvement is reduced by the increase in the value of your property, and the difference is the medical expense.

A stairlift is often treated differently from an elevator because it is removable and rarely changes what a buyer would pay. Your preparer should make that call for your home.

If you are adding an elevator or doing a full bathroom remodel, a before-and-after appraisal is the standard way to show how much value was added, if any. Keep it with your tax records.

You can only deduct the part above 7.5 percent of your income

Two conditions. Medical expenses count only if you itemize on Schedule A instead of taking the standard deduction. And even then, you can only deduct the portion of your total medical expenses for the year that exceeds 7.5 percent of your adjusted gross income.

Because of that threshold, one large project in a single year often clears the line when small purchases spread across several years never do. A $10,000 bathroom, added to your other medical costs for the year, may qualify where a single grab bar on its own would not. Your preparer can run it both ways.

Only what you actually paid counts

If insurance, Medicaid, a VA program, or a grant covered part of the cost, subtract that first. Veterans using a VA HISA grant should count only what they paid themselves — which, given how small the HISA grant is, is often most of the project.

If you are an adult child paying for modifications in a parent's home, the cost may still count on your return if your parent qualifies as your dependent — or would qualify except for the income test. That exception is common and has conditions attached, so raise it with your preparer directly rather than assuming either way.

Keep six records in one folder

Keep these together, paper or digital, for at least three years after you file:

1. The doctor's or therapist's letter recommending the modification

2. The signed contract and the invoice for the job

3. Proof of payment: canceled checks, card statements, or financing paperwork

4. Any appraisal or written estimate of the change in home value

5. Records of any reimbursement from insurance, the VA, or a grant

6. Photos of the finished work

If you need a copy of an invoice from a job we did, call the office and we will send one.

In Texas this is a federal question only

Texas has no state income tax, so there is no state-level medical expense deduction to chase. Property tax is a separate matter and is not affected by any of the rules above. If you are 65 or older or have a disability, ask your county appraisal district about homestead exemptions — that is a different program with its own paperwork.

Two questions for your tax preparer

Tax rules change, and everything above reflects IRS Publication 502 as currently published. Bring your invoice and your doctor's letter and ask two things: does this project qualify, and does it make sense to itemize this year.

If you are still planning the work, we can help you get the paperwork right from the start. Our free in-home assessment gives you a written price range, and if you ask, we can note the medical reason for each item on the estimate. Contact us or call (833) 548-6447 to reach our Houston, Austin, or San Antonio office.

Common questions

Is a walk-in tub or roll-in shower tax deductible?

It can be, when a doctor has recommended it for a medical condition. Bathroom modifications such as railings and support bars are on the IRS list of improvements that generally do not increase a home's value, so the full cost is usually allowed. A full remodel that goes beyond the accessibility work may be treated partly as an improvement that adds value.

Can I deduct a stairlift?

Often yes, and usually in full, because a stairlift is removable and rarely changes what a buyer would pay for the house. It is not named on the IRS list either way, so your tax preparer makes the call based on your home.

What about a home elevator?

Only partly. IRS Publication 502 says elevators generally add value to a house, so you subtract the increase in your home's value from the cost and the remainder is the medical expense. An appraisal before and after the work is the usual way to document it.

Do I need a doctor's note?

The IRS does not require a specific form, but a written recommendation from a doctor, physical therapist, or occupational therapist is the clearest evidence that the main purpose was medical care. Get it before the work starts.

Can I deduct work I paid for in my parent's home?

Possibly, if your parent is your dependent, or would be except for the income test. The rules have conditions attached and this comes up often enough that it is worth asking your preparer about directly.

Does a VA HISA grant affect what I can deduct?

Yes. Subtract any grant money from the cost first and count only what you paid out of pocket. Because the HISA grant covers a small share of most projects, the out-of-pocket balance is often substantial.