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Long Term Care Insurance: Tax

Deductibility Of Long Term Care Insurance Premiums

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Qualified Long Term Care Insurance Policies

Premiums for "Qualified" Long Term Care Insurance Policies are treated as if they are an unreimbursed medical expense just like other uncompensated medical expenses, except there is a cap.

The amount of the premiums is deductible to the extent that they, along with other unreimbursed medical expenses (including "Medigap" insurance premiums) exceed 10% of the insured's adjusted gross income. (In the years 2013–2016, if either the taxpayer or the taxpayer’s spouse has turned 65 before the close of the tax year, the threshold is 7.5% of AGI. In 2017 the 10% threshold will apply to all taxpayers.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for the tax year 2012. Any premium payments above the limits are not deductible as medical expense.

Attained age before the close of the taxable year: Maximum Deduction

  • Age 40 or less $350
  • Age 41 - 50 $660
  • Age 51 - 60 $1,310
  • Age 61 - 70 $3,500
  • Age 71 and over $4,370

Non-Qualified Long Term Care Insurance Policies

If you have a non-tax qualified Long Term Care Insurance policy, you may or may not be able to deduct any part of your annual premiums. This area has not been clarified.

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