Question: My mother just transferred into a Skilled Nursing Facility from a hospital stay. We hope it is temporary, but if it isn’t, she will have to pay over $400 per day plus a 6.8% tax! What is that tax?

Answer: I hope that your mother is feeling better and getting stronger every day. When individuals go from the hospital to a Skilled Nursing Facility (SNF) it is often considered a Rehabilitation (Rehab) Stay. When you have Medicare, these Rehab stays are usually covered by your health insurance. Being covered doesn’t necessarily mean that the stay will be paid in full by your health insurance, usually there are copays the individual pays during those temporary stays. I don’t want to spend too much time explaining that part of the stay. I really want to move onto the question about what happens when the insurance stops paying for the Rehab stay.

If your mother progresses well during her rehab stay, you may find that she can leave before her insurance cuts off payment. If she doesn’t get strong enough, or well enough to return to her previous living situation, she may need to stay in the SNF until other arrangements can be made and sometimes individuals are never able to leave the SNF.

If she does need to stay, she will be paying privately for her stay. The cost is over $400 and getting closer to $500 for each day she is there. On top of that private pay rate for staying there, she will be charged a 6.8% surcharge tax in New York State. This tax began in 2002 as part of the New York State Health Care Reform Act, at a rate of 6%. Over the years it has increased to the amount it is today of 6.8%. This tax is a separate line item on the bill each month.

It is tax season and you can include this surcharge tax as part of your mother’s New York State (NYS) Income Tax Return. The NYS Tax form to use for this Surcharge Tax is IT-258. The form has very few lines, basically her name and SS#, the facility she is or was in and the amount paid in what the form calls “Assessment” but I am calling the Surcharge Tax. Anyone who has been in a Skilled Nursing Facility during 2022 and paid privately for their care, can include this information on their 2022 NYS Tax Return.

It is significant to note that the total cost of her care is not included on the form, ONLY the Surcharge Tax. Your mother paid 6.8% in 2022, but she can only claim 6% of the tax on the form. So in determining what she paid, you may need to review the total amount paid to the nursing home for care (not including the Surcharge Tax) and then multiply that by 6%. To give an example ($400 X 365 days = $146,000). Multiply $146,000 X 6% = $8760. When reviewing your mother’s bills, using this math, she paid more than $8,760 in Surcharge Tax because her actual rate was 6.8% ($9,928), but she can only include the $8,760 on this form because the base rate of the Surcharge Tax is what is allowable.

The form itself has very clear with concise instructions and explanations on the back and is worth reading so you understand this process.

Working with whomever prepares your mother’s taxes, it is important to inform them of any changes in your mother’s situation. Being in a Nursing Home is one of those changes, even if temporarily there, she can claim this Surcharge Tax if she paid for her care.

I hope your mother continues to improve and if desired, returns to her previous living situation. There may be other issues and concerns as her situation evolves, there are lots of agencies and resources out there to help you both.

Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call 716-720-9797 or email SLM@lutheran-jamestown.org.