California Partnership for Long Term Care

Long-Term Care Insurance and Taxes

“The Deductibility of Long-Term Care InsuranceSpecific type of insurance policy designed to offer financial support to pay for necessary long-term care services. Premiums”

As a courtesy, the Partnership is providing you important information concerning the deductibility of long-term careCare given to someone who can no longer perform activities of daily living. insurance premiums.

If, for a taxable year, you itemize your deductions on Form 1040, Schedule A (PDF), you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income. For years beginning after December 31, 2012, you may deduct only the amount by which your total medical expenses exceed 10% of your adjusted gross income. You figure the amount you are allowed to deduct on Form 1040, Schedule A. However, individuals age 65 and older (and their spouses) are temporarily exempt from the increase. This exemption for seniors applies to any tax year beginning after December 31, 2012 and ending before January 1, 2017 if the taxpayer or the taxpayer’s spouse attained age 65 for the tax year.

IRS Publication 502, Medical and Dental Expenses, contains additional information on medical expenses including who will qualify as your dependent for purposes of the deduction and how you figure and report the deduction on your return.

Medical care expenses include the insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy covering qualified long-term care services. If you are an employee, medical expenses do not include that portion of your premiums treated as paid by your employer under its sponsored group accident or health policy or qualified long-term care insurance policy.

Eligible Long-Term Care Premiums. For taxable years beginning in 2014, the limitations under § 213(d)(10), regarding eligible long-term care premiums includible in the term "medical care," are as follows:

Attained Age Before the Close of the Taxable Year

Limitation on Premiums

40 or less

$   370

More than 40 but not more than 50

$   700

More than 50 but not more than 60

$1,400

More than 60 but not more than 70

$3,720

More than 70

$4,660

For additional information, visit http://www.irs.gov/taxtopics/tc502.html , or contact your tax preparer.