Are Long Term Care Expenses Tax Deductible?

The need for long-term care can bring substantial costs for services and support. To help lessen this financial impact, the Internal Revenue Service (IRS) allows for the deduction of certain long-term care expenses as medical expenses. This deduction can provide financial relief to those paying for ongoing care for themselves, a spouse, or a dependent, provided specific criteria are met.

Qualifying Long Term Care Services

For an expense to be tax-deductible, it must be for “qualified long-term care services.” The IRS defines these as necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services. These services are intended to address the needs of an individual who requires assistance over an extended period.

Beyond direct medical treatments, qualified services also include maintenance and personal care. These services assist an individual with personal needs due to a chronic illness, such as help with daily activities like bathing, dressing, and eating. It is important to distinguish this type of assistance from general household services, like cleaning or cooking for the entire household, which are not deductible.

Care can be provided in various settings, including a nursing home, an assisted living facility, or the individual’s home. If the main reason for being in a facility is the availability of medical care, the entire cost, including meals and lodging, qualifies as a medical expense. For in-home care, this includes wages paid for nursing services.

Requirements for Tax Deductibility

For long-term care expenses to be deductible, the recipient must be certified as a “chronically ill individual.” This designation requires certification from a licensed health care practitioner within the previous 12 months. The certification must state that the individual meets one of two conditions related to their functional or cognitive capacity.

The first way to qualify is an inability to perform certain basic life activities. An individual must be unable to perform at least two “Activities of Daily Living” (ADLs) without substantial assistance from another person for a period expected to last at least 90 days. The six ADLs specified by the IRS are eating, toileting, transferring, bathing, dressing, and continence.

The second way to qualify involves cognitive health. An individual meets the definition if they require substantial supervision to protect them from health and safety threats due to a severe cognitive impairment. This provision is often applicable to individuals with conditions like Alzheimer’s disease or other forms of dementia, even if they are physically capable of performing daily activities.

In addition to the chronically ill status, all services must be provided according to a “plan of care.” This plan must be prescribed by a licensed health care practitioner, such as a physician, registered nurse, or licensed social worker. The plan of care acts as a formal outline for the specific services the individual requires to address their health and assistance needs.

Calculating the Deductible Amount

The deduction for medical expenses, including qualified long-term care costs, is limited by the taxpayer’s income. These expenses are only deductible to the extent that they exceed 7.5% of the taxpayer’s Adjusted Gross Income (AGI). You must combine all eligible medical expenses, not just long-term care, when determining if this threshold has been met.

For example, a taxpayer with an AGI of $80,000 has a 7.5% threshold of $6,000. If this taxpayer incurred $10,000 in total qualified medical expenses, they could deduct $4,000, which is the amount that exceeds the $6,000 floor.

Premiums paid for a qualified long-term care insurance policy are also considered a medical expense, but their deductibility is subject to annual, age-based limits. For 2025, these limits are:

• Age 40 or under: $480
• Ages 41 to 50: $900
• Ages 51 to 60: $1,800
• Ages 61 to 70: $4,810
• Over age 70: $6,020

These premium amounts are added to other medical expenses before the 7.5% AGI limitation is applied.

Claiming the Deduction on Your Tax Return

To claim a deduction for long-term care expenses, a taxpayer must itemize their deductions using Schedule A (Form 1040). The choice to itemize is made if the total of all itemized deductions, such as medical expenses and state taxes, is greater than the standard deduction for the taxpayer’s filing status.

The process involves totaling all qualifying medical expenses for the year, including the eligible portion of long-term care services and insurance premiums. This total is first reduced by the 7.5% of Adjusted Gross Income (AGI) floor. The resulting figure, which is the deductible portion of your medical expenses, is entered on Line 1 of Schedule A.

You must maintain records to support the claimed deduction, such as receipts, invoices, and insurance statements. Documentation of the “chronically ill” certification and the prescribed plan of care should also be kept. These records are necessary to substantiate the expenses in the event of an IRS inquiry.

Using Health Savings Accounts for Long Term Care

A Health Savings Account (HSA) offers a tax-advantaged way to pay for long-term care costs. An HSA is a tax-exempt account used to pay or reimburse certain medical expenses. These accounts provide a triple-tax advantage: contributions are tax-deductible, funds grow tax-deferred, and withdrawals for qualified medical expenses are tax-free.

Funds held within an HSA can be used to pay for the same qualified long-term care services that are eligible for the itemized deduction. This applies as long as the services are required by a chronically ill individual under a prescribed plan of care. Using HSA funds for these expenses is a tax-free distribution, which is a direct financial benefit.

HSA funds can also be used to pay for long-term care insurance premiums. The amount that can be withdrawn tax-free for this purpose is subject to the same age-based annual limits that apply to the itemized deduction. For example, an individual over age 70 could use up to $6,020 from their HSA in 2025 to pay for these premiums tax-free.

This strategy is separate from the itemized deduction on Schedule A. While the itemized deduction reduces taxable income, using an HSA allows for direct, tax-free payment of expenses. For individuals with a high-deductible health plan who are eligible to contribute to an HSA, it is an effective tool for managing long-term care costs.