Is long-term care insurance tax deductible?
Sometimes. Premiums for a tax-qualified policy count as medical expenses, deductible on Schedule A only to the extent your total medical costs exceed 7.5% of income — and only up to an age-based limit. Self-employed people and business owners get a far better deal.
It can be, but the rules matter. Only tax-qualified long-term care policies (nearly all sold today) are eligible, and how much you can deduct depends on who you are.
Individuals who itemize. Premiums count as a medical expense on Schedule A, but with two limits: they count only up to an age-based "eligible premium" cap, and only the portion of your total medical expenses above 7.5% of adjusted gross income is deductible. Because of that floor, many salaried taxpayers get little or no benefit.
Self-employed people and business owners do much better — see business deductions for LTC premiums.
Benefits are usually tax-free too, as long as they stay within the IRS per-diem limit. Tax rules are individual — confirm with a tax professional.
General information only. This is educational and not insurance, legal, tax, or financial advice. Rules and products vary and change — confirm the specifics with a licensed professional.
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