Long Term Care Insurance Tax Deduction Eligibility

 

Beginning in 1996, the federal government took another step to encourage Americans to purchase Long Term Care insurance with the passing of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA offers tax incentives to those who purchase a Tax-Qualified Long Term Care insurance policy, which is the most common form of policies sold today.

Tax Qualified Long Term Care Insurance premiums are treated as medical expense deductibles. Medical expenses can be deducted from the amount which exceeds 7.5 percent of adjusted gross income. The amount of Long Term Care insurance premiums that can be claimed depends on the age of the insured. See the chart below to see the limit. Some states also may offer additional tax incentives. Click here to learn more.

 

Tax Deduction Limits for Long Term Care Insurance Premiums, 2016

 

Attained Age	Deduction Limit
40 or less	$390
41-50	$730
51-60	$1,460
61-70	$3,900
71 and older	$4,870

 

Source: IRS

It is also important to check with a personal tax advisor to see how much you can deduct.