Can I deduct premiums paid for long-term care insurance (LTCI)?

Answer:

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 10 percent of your adjusted gross income (AGI). Qualified LTCI premiums are deductible as medical expenses (subject to the 10 percent of AGI floor) within certain limits, based on your age.

Note: Prior to 2013, the threshold to deduct medical expenses was 7.5 percent of adjusted gross income. The threshold remains 7.5 percent until 2017 for those age 65 or older.

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 2017, qualified LTCI premiums are deductible as medical expenses (subject to the 10 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

$410 (up from $390 in 2016)

41-50

$770 (up from $730 in 2016)

51-60

$1,530 (up from $1,460 in 2016)

61-70

$4,090 (up from $3,900 in 2016)

71 and older

$5,110 (up from $4,870 in 2016)

For more information, consult a tax professional.