Maximizing Tax Deductions For Long-Term Care (LTC) Insurance

By: Michael Kitces

Under IRC Section 213(d)(1)(D), premiums for long-term care insurance are deductible along with other individual medical expenses.

Notably, to be eligible for deductibility, the long-term care insurance must be (tax-)“qualified” coverage (as defined under IRC Section 7702B(b)), though in practice virtually all long-term care insurance issued today (and in the past 20 years) is tax-qualified. (Non-Tax-Qualified, or NTQ long-term care insurance, is primarily characterized by either not requiring a minimum Activities of Daily Living restriction, or being more lax in the certification requirements to be eligible for claims.)

Premiums paid for tax-qualified LTC insurance are deductible if paid for the individual taxpayer themselves, his/her spouse, or any dependent as defined under IRC Section 152, which can include both dependent children and even dependent parents, if they otherwise qualify as dependents for tax purposes, and without regard to the must-be-unmarried or income tests that otherwise apply to a “qualifying relative” dependent.

While premiums are deductible, though, the amount of the deduction is limited.

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