Long Term Care (LTC) Premium Deduction
Long Term
Care
- If you make Long Term Care or LTC premium payments learn about the tax deductions below.
- If you received Long Term Care Insurance reimbursement or other payments see the section below.
Instructions on how to enter LTC premiums or LTC reimbursement payments on eFile.com
The deduction of tax qualified long-term care insurance policies is increased each year due to inflation. Thus, the long-term care insurance deduction can be considered a retirement subsidy. However, you need to check if your newly purchased long-term care insurance policies offers the tax deductible opportunity. See other tax deduction including medical expense deductions.
When you prepare and e-file your next tax return, enter the qualified long term care premium dollar amount during the tax interview and the tax app will show it on Schedule A of your tax return. Review instructions for Form 1099-LTC.
Long Term Care Deduction Limitations
Each year, the LTC or Long Term Care insurance deduction limits are evaluated and often adjusted for inflation- see the amounts in the tables below. As an example, a married filing jointly couple age 70 or older who both have the right kind of long-term care insurance policy can deduct as much as $11,920. Important: This is only available to tax-qualified health-based long-term care insurance policies.
If you require long term care, it might be tax deductible. This long-term care must be medically necessary, e.g. for preventive, therapeutic, treating, rehabilitative, personal care, or other services. See Medical and Dental Expenses (Including the Health Coverage Tax Credit) for a full list of qualifying services. Generally, the cost of meals and lodging at an assisted-living facility or nursing home is included if the reason for being there is to get qualified medical care.
In comparison, linked-benefit Long Term Care or LTC policies, such as life insurance and/or annuity policies with long term care benefits, in most cases DO NOT qualify for the insurance or premium tax deduction.
Generally, if a taxpayer purchases the Long Term Care insurance before retirement, the tax deduction does not apply or the taxpayer does not reach the threshold to deduct the LTC premium. In comparison, after working on the start of retirement, taxpayers can benefit more likely from this tax deduction. Again, check with the insurance carrier to be certain about this tax deduction.
Similar to the tax deduction, like the deduction for long-term-care services, the long term care insurance premium is an itemized deduction for medical expenses. Check on the given threshold by tax year, age, etc.:
Attention: If you are self-employed, you might be able to deduct premiums paid for long-term-care insurance as an adjustment to income without having to itemize.
Tax Deduction Limits for Long Term Care Insurance Premium Payments
The table here is for the current year due by this year's Tax Day. Use these figures to plan your return - prepare and e-file on eFile.com and get the most out of your refund.
Current Year, 2023 LTC Deduction
Use the rates below to plan for your 2023 Taxes. Note that the married deduction is increased only if both spouses have a qualifying long-term health insurance premium.
71 or more
$5,960
$11,920
2024 LTC Deduction
Use the rates below to plan for your 2024 Taxes. Note that the married deduction is increased only if both spouses have a qualifying long-term health insurance premium.
71 or more
$5,880
$11,760
2022 LTC Deduction
Use the rates below to file for your 2022 Taxes. Note that the married deduction is increased only if both spouses have a qualifying long-term health insurance premium.
71 or more
$5,640
$11,280
2021 LTC Deduction Limits
The table below shows the increased amounts for 2021. Note that the married deduction is increased only if both spouses have a qualifying long-term health insurance premium.
71 or more
$5,640
$11,280
Previous Year Deduction Amounts
The table below shows the rates by tax year and age for previous years - see all back tax resources, such as forms and calculators.
Age 40 or less
2020: $430
2019: $420
Age 41-50
2020: $810
2019: $790
Age 51-60
2020: $1,630
2019: $1,580
Age 61-70
2020: $4,350
2019: $4,220
Age 71 or more
2020: $5,430
2019: $5,270
Long term care insurance premiums are only deductible if your total un-reimbursed medical expenses exceed 7.5% of your AGI. This includes your premiums plus any other medical expenses for which you had to pay out of pocket. If your insurance premium plus your medical expenses is significant enough, the eFile Tax App will generate the deduction forms for you when you prepare your taxes on eFile.com. See how online tax preparation and e-filing works.
Long Term Care Insurance Contract Payments or Reimbursements
Did you get a from 1099-LTC that looks like this: Form 1099-LTC Long-Term Care and Accelerated Death Benetis If so, review the entries in box regarding payments you might have received.
2. If Box 3 on form LTC-1099 is marked "Reimbursed Amount" - and you have a Non-Tax Qualified Contract, (see box 4) then some or all of your benefits may be taxable. Again, the insurance company can tell you if your policy is considered a Non-Tax Qualified policy. A Non-Tax Qualified policy may result in some or all of your benefits being taxable. You or the person preparing tax submissions will need to determine the taxable portion of non-qualified long term care benefits for purposes of an individual income tax return.
If Box 3 is marked "Per Diem" (which will happen for policies that are considered Indemnity policies) then the amount you may exclude from taxable income being reported is limited.
For "Per diem"/"indemnity"/"cash benefit" payments where the full benefit is paid regardless of any actual care expense incurred, the benefits are tax-free up $420/day in 2023 and decreased to $410 per day ($12,470 per month) in 2024 even if actual expenses are less.
In 2023, an indemnity benefit of $450 per day would produce a taxable income of $30 per day.
- Because benefits were paid on a per diem (indemnity) basis, without regard to the actual long term care expenses incurred; the amount of benefits that may be excluded from income is subject to a daily maximum amount.
- If this per diem (indemnity) limitation is exceeded, part of the benefits received may be taxable. The amount of the limitation increases every year and is included on our website under the page long-term care insurance tax benefits.
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