As Americans live longer and healthcare costs continue to rise, long-term care insurance has become an essential part of financial planning—especially for aging individuals and those with chronic conditions. Fortunately, the IRS provides a tax benefit for those who pay long-term care (LTC) insurance premiums, allowing them to deduct a portion of these costs on their federal income tax return. However, the deduction comes with specific rules, age-based limits, and eligibility conditions. In this guide, we’ll walk you through how to deduct long-term care insurance premiums in 2025, including what qualifies, how much you can deduct, and how to claim the deduction.
What Is Long-Term Care Insurance?
Long-term care insurance covers services that help individuals with activities of daily living (ADLs), such as bathing, dressing, eating, toileting, and transferring. These services may be provided in a nursing home, assisted living facility, adult day care center, or at home. Unlike standard health insurance or Medicare, long-term care policies are specifically designed to help pay for extended care needs due to age, chronic illness, disability, or cognitive impairment.
Are Long-Term Care Insurance Premiums Deductible?
Yes, long-term care insurance premiums are deductible as a medical expense if the policy is a “qualified” policy under IRS guidelines. The deduction is available if you itemize your deductions using Schedule A of Form 1040. However, only a portion of the premiums is deductible, and the deductible amount is based on your age at the end of the tax year. The premiums must also be unreimbursed and not paid using pre-tax dollars (e.g., through an employer-sponsored cafeteria plan or HSA).
2025 Deductible Limits for Long-Term Care Premiums
The IRS sets annual maximum deduction limits based on the age of the insured individual at the end of the tax year. These limits apply per person. For tax year 2025, the maximum deductible amounts are as follows:
| Age at End of 2025 | Maximum Deductible Premium |
|---|---|
| 40 or under | $470 |
| 41 to 50 | $880 |
| 51 to 60 | $1,770 |
| 61 to 70 | $4,720 |
| 71 or older | $5,960 |
For example, if you are 67 years old and paid $6,000 in LTC premiums in 2025, you may only deduct up to $4,720—the age-based cap for your age group.
Who Qualifies for the Deduction?
You can deduct LTC insurance premiums paid for:
- Yourself
- Your spouse
- Your dependents
Additionally, you may deduct premiums paid for a child under the age of 27 at the end of the tax year, even if they are not listed as a dependent on your return.
To qualify, the policy must be a “qualified long-term care insurance contract” under Section 7702B of the Internal Revenue Code. Most reputable policies issued after 1997 meet these standards. If you’re unsure whether your policy qualifies, request documentation from your insurance provider.
How to Claim the Deduction
You must itemize deductions on Schedule A to claim the long-term care premium deduction. Here’s how to do it:
- Calculate the total amount of qualified medical expenses for the year, including allowable LTC premiums up to the age-based cap.
- Enter the total medical expenses on Line 1 of Schedule A.
- Enter your adjusted gross income (AGI) on Line 2.
- Multiply your AGI by 7.5% and enter the result on Line 3.
- Subtract Line 3 from Line 1 to determine the deductible amount.
Only the portion of your medical expenses that exceeds 7.5% of your AGI is deductible. If your total medical expenses fall below this threshold, you will not receive any deduction—even if your premiums are within the allowable limits.
When You Can’t Claim the Deduction
You cannot deduct long-term care insurance premiums if:
- The premiums were paid using pre-tax dollars through an employer plan.
- You were reimbursed for the premiums by an employer or third-party insurer.
- You are claiming the standard deduction and not itemizing.
- The policy is not considered “qualified” under IRS guidelines.
It’s also important to note that any premiums paid for life insurance riders or return-of-premium features embedded in the policy are generally not deductible.
How Self-Employed Individuals Benefit
If you’re self-employed, you may be able to deduct LTC insurance premiums as an “above-the-line” deduction on Schedule 1 of Form 1040, rather than itemizing. However, this is still subject to the same age-based deduction limits listed earlier. Additionally, the deduction cannot exceed your net self-employment income.
This deduction is available to sole proprietors, partners, and S corporation shareholders who own more than 2% of the company. If you qualify, this above-the-line deduction lowers your AGI and increases your eligibility for other tax credits and deductions.
Documentation You Need
To ensure that your deduction stands up under IRS scrutiny, you should maintain the following records:
- Policy contract showing it qualifies under Section 7702B
- Statements showing the total amount of premiums paid during the year
- Proof of payment (cancelled checks, bank statements, credit card receipts)
- Your date of birth to confirm your age-based deduction limit
Keep these documents for at least three years after the date you file your tax return in case of an audit.
Is Long-Term Care Insurance Worth It?
From a tax perspective, long-term care insurance offers a dual benefit: it protects your savings from high care costs while also offering tax-deductible premiums under certain conditions. This can be particularly valuable for seniors or individuals with a family history of chronic illness. While the deduction alone shouldn’t drive your decision to purchase a policy, it is an important consideration in your overall financial and retirement planning strategy.
Conclusion
Long-term care insurance premiums can be a valuable tax deduction if you meet IRS requirements. In 2025, the deduction is available to taxpayers who itemize and who pay for qualified LTC policies within the age-based annual limits. The deduction can apply to yourself, your spouse, and your dependents, and self-employed individuals may also benefit from an above-the-line version of this deduction. However, the deduction is limited by your AGI and only applies to expenses that exceed the 7.5% threshold.
Be sure to keep accurate records and consult IRS Publication 502 or a licensed tax professional to ensure you’re taking full advantage of this often-overlooked deduction. With careful planning, long-term care insurance can not only provide peace of mind but also meaningful tax savings.
