Client Questions: Can I Deduct Premiums Paid for Long-term Care Insurance (LTCI)?
It depends on several factors. Your LTCI contract must be a qualified one, you must itemize deductions on Schedule A of IRS Form 1040, and the total of your medical expenses (including your LTCI deduction) must exceed 7.5 percent of your adjusted gross income (AGI). Qualified LTCI premiums are deductible as medical expenses (subject to the 7.5 percent of AGI floor) within certain limits, based on your age.
Note: The threshold to deduct medical expenses is 7.5 percent of AGI for 2019 and 2020.
If you bought your policy before January 1, 1997, and it met the requirements of the state in which it was issued, it is automatically considered a qualified policy. LTCI contracts issued subsequently are only considered qualified for a tax deduction if they meet certain federal standards. In 2020, qualified LTCI premiums are deductible as medical expenses (subject to the 7.5 percent of AGI floor) within the following limits, based on your age at the end of the tax year:
Age:
Limit on Deduction:
40 or less
$430 (up from $420 in 2019)
41-50
$810 (up from $790 in 2019)
51-60
$1,630 (up from $1,580 in 2019)
61-70
$4,350 (up from $4,220 in 2019)
71 and older
$5,430 (up from $5,270 in 2019)
For more information, consult a tax professional.
Copyright 2006-2019 Broadridge Investor Communication Solutions, Inc. All rights reserved. The information provided is from a third-party source which we believe to be reliable, but we have not independently verified the content. This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider.
