Long-term care insurance can be one of the most expensive insurance premiums you’ll pay — and fortunately, the IRS allows a partial deduction for those costs. Whether you can deduct your premiums, and how much, depends on your age, your income, and how you file your taxes. Here’s a complete breakdown for 2025.
The Short Answer: Yes, With Limits
Long-term care insurance premiums are deductible as a medical expense under IRS rules — but only up to an age-based limit set each year. You can’t deduct the full premium you pay; the IRS caps the deductible amount based on how old you are at the end of the tax year.
And like all medical expense deductions, the deductible amount only counts toward your tax savings after it (combined with all other qualifying medical expenses) exceeds 7.5% of your Adjusted Gross Income (AGI).
2025 Age-Based Deduction Limits for Long-Term Care Insurance
The IRS adjusts these limits annually for inflation. For the 2025 tax year, the maximum deductible premium amounts by age are:
| Age at End of Tax Year | Maximum Deductible Premium (2025) |
|---|---|
| 40 or under | $480 |
| 41 to 50 | $890 |
| 51 to 60 | $1,790 |
| 61 to 70 | $4,770 |
| 71 or older | $5,960 |
So if you’re 65 years old and pay $6,000 per year in long-term care insurance premiums, only $4,770 of that counts as a qualifying medical expense. The remaining $1,230 is not deductible.
You Must Have a “Qualified” Long-Term Care Insurance Contract
Not every long-term care policy qualifies for the deduction. To be deductible, the policy must be a “qualified long-term care insurance contract” under IRS rules. A qualified contract must:
- Be guaranteed renewable
- Not provide a cash surrender value or other monetary value that can be borrowed against
- Provide coverage only for qualified long-term care services (not cover expenses that would be covered by Medicare)
- Meet specific consumer protection requirements under state law
Most modern long-term care insurance policies are structured to be qualified contracts — but if you have an older policy or a hybrid life/LTC policy, check with your insurer or a tax advisor. Your insurance company should provide documentation confirming whether your policy qualifies.
The 7.5% AGI Threshold Still Applies
Remember: long-term care insurance premiums (up to the age-based limit) are just one component of your total medical expenses. The IRS only allows you to deduct the portion of all qualifying medical expenses that exceeds 7.5% of your AGI.
For example, suppose you’re 66 years old with an AGI of $80,000. Your 7.5% threshold is $6,000. You pay $5,500 in long-term care premiums (under the $4,770 cap — wait, $5,500 exceeds the $4,770 cap, so only $4,770 counts). You also have $3,000 in other qualifying medical expenses. That gives you $7,770 in total qualifying expenses. Subtracting your $6,000 threshold, you get a $1,770 deduction — assuming you itemize.
Self-Employed Individuals Get Better Treatment
If you’re self-employed — including as a sole proprietor, partner, or S-corporation shareholder owning more than 2% — you may be able to deduct long-term care insurance premiums as an adjustment to income, rather than as an itemized deduction. This is significant because:
- You don’t have to itemize to claim it — it reduces your AGI directly
- It’s not subject to the 7.5% AGI threshold
- The deduction still can’t exceed the age-based annual limit
- You can’t deduct premiums for months when you were eligible for employer-subsidized health coverage through a spouse’s employer
Self-employed individuals deduct this on Schedule 1, Line 17 of their Form 1040 (as part of the self-employed health insurance deduction line), using Form 7206 to calculate the allowable amount.
What About Employer-Paid Premiums?
If your employer pays your long-term care insurance premiums, those amounts are generally excluded from your gross income — you don’t pay taxes on that benefit. However, you also can’t double-dip and deduct those employer-paid premiums as a medical expense. You can only deduct premiums you personally paid with after-tax dollars.
Hybrid Life Insurance/LTC Policies
Hybrid policies that combine life insurance with long-term care benefits have become popular, but the tax treatment is more complex. Generally, only the portion of the premium that’s allocable to the long-term care coverage — and only if the policy is a qualified LTC contract — is potentially deductible. Premiums for the life insurance component are not deductible as a medical expense. You’ll typically need to get a breakdown from your insurer to calculate the deductible portion.
Benefits Received Are Generally Tax-Free
There’s a related tax benefit worth knowing: when you actually receive benefits from a qualified long-term care insurance policy, those benefits are generally tax-free. In 2025, benefits are tax-free up to $420 per day (or the actual cost of care if higher). This exclusion is one of the key advantages of long-term care insurance from a tax planning perspective.
How to Claim the Deduction
For employees who itemize, long-term care insurance premiums (up to the age-based limit) go on Schedule A as part of your total medical expenses, subject to the 7.5% AGI floor. For self-employed individuals, the deduction goes on Schedule 1 as a self-employed health insurance deduction, calculated using Form 7206.
Keep your premium payment records and your insurer’s confirmation that your policy is a qualified long-term care contract. If you’re unsure whether your policy qualifies, contact your insurance company or consult a tax professional.
State Deductions May Be Available Too
Many states offer their own deductions or credits for long-term care insurance premiums, sometimes more generous than the federal rules. For example, some states allow a full deduction for premiums without the age-based cap, or offer a tax credit rather than a deduction. Check your state’s tax rules — the combined federal and state benefit can make long-term care insurance even more tax-advantaged.
The Bottom Line
Long-term care insurance premiums are partially deductible as a medical expense — up to an age-based limit that ranges from $480 to $5,960 in 2025. To benefit from the deduction as a regular employee, you must itemize and your total medical expenses must exceed 7.5% of your AGI. Self-employed individuals get a better deal, being able to deduct premiums above-the-line without itemizing. Given the high cost of long-term care insurance, understanding these rules can meaningfully reduce your tax bill.
Related: Are Medical Expenses Tax Deductible? The Complete 2025 Guide | Health Insurance Tax Deduction: Self-Employed vs. Employee Rules | How the 7.5% AGI Threshold Works
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