Deducting Long-term Care Insurance Premiums

If you have long-term care insurance, you are taking a great step to provide for your future. The good news is that the benefits do not reside solely in the future because you may be able to receive a tax deduction for the premiums on your long-term care insurance right now. The following information can help you determine if you qualify for a deduction.

If you have long-term care insurance, you are taking a great step to provide for your future. “If you have a tax-qualified long-term-care insurance policy, you can count a portion of the premium as a tax-deductible medical expense,” states Kimberly Lankford from Kiplinger. “Most long-term-care policies issued in the past several years meet the requirements (ask your insurer about yours).”

So, what counts as a qualified long-term care insurance policy? According to the IRS, in order to qualify, the insurance contract must only provide coverage of qualified services related to long-term care. It also must be guaranteed renewable. Furthermore, it can’t provide any cash surrender value or any other money to be borrowed, pledged, assigned or otherwise paid.

The contract also must show that refunds are only used to increase future benefits or reduce future premiums. There is an exception to this for refunds issued on the death of the insured person or if they completely cancel or surrender the contract.

“Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses,” according to the IRS.

The amount you can deduct depends on how old you are. These are the maximum amounts that you can deduct from your annual premium for the 2015 tax year:

  • 40 years old or younger – $380
  • 41 through 50 – $710
  • 51-60 – $1,430
  • 61-70 – $3,800
  • 70 or older – $4,750

The amount you can deduct also depends on how much you’ve spent on medical expense that were not reimbursed. If you are not self-employed, you have to add the cost of your premiums to all of your unreimbursed medical expenses, and that number has to exceed a certain percent of your adjusted gross income in order for that excess to qualify as a deduction. That threshold is 10 percent of your adjusted gross income if you are under 65 and 7.5 percent if you are 65 or older.

If you are able to make a deduction, it will be reported on Schedule A (Form 1040).

“If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed a certain percentage of your income,” according to

“Also, if you are an eligible retired public safety officer, you cannot include premiums for long-term care insurance if you elected to pay these premiums with tax-free distributions from a qualified retirement plan made directly to the insurance provider and these distributions would otherwise have been included in your income,” states the IRS.

If you have any other questions, you can read more about deducting medical expenses at


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