How to Claim the Long Term Care Tax Deduction

Long-term care, which includes services for individuals unable to perform basic daily activities, presents significant financial considerations. The Internal Revenue Service (IRS) allows taxpayers to mitigate some of these costs by deducting expenses, including premiums for specific insurance policies, as medical expenses. This tax provision offers financial relief for ongoing care associated with chronic conditions.

The ability to deduct these expenses depends on a taxpayer’s specific financial situation. The deduction is claimed as part of itemized deductions, so it is only available to those who do not take the standard deduction. Understanding the specifics of who qualifies, what costs are included, and how to claim the deduction is governed by IRS regulations.

Eligibility Requirements for the Deduction

To claim a deduction for long-term care expenses, a taxpayer must itemize deductions on Schedule A of their Form 1040. Those who take the standard deduction cannot separately deduct these costs. The decision to itemize depends on whether a taxpayer’s total itemized deductions exceed their available standard deduction amount.

A significant factor is the Adjusted Gross Income (AGI) threshold. Total medical expenses, including qualified long-term care costs, are only deductible to the extent that they exceed 7.5% of the taxpayer’s AGI. This means if your AGI is $100,000, the first $7,500 of your medical expenses provide no tax benefit.

The care recipient for whom the expenses are paid can be the taxpayer, their spouse, or a qualifying dependent. For a dependent to qualify, the taxpayer must provide more than half of their support for the year. The eligibility requirement centers on the medical status of the person receiving care, whom the IRS defines as a “chronically ill individual.”

A licensed health care practitioner must certify the individual as chronically ill. This certification confirms one of two conditions. The first is an inability to perform at least two Activities of Daily Living (ADLs) without substantial assistance for at least 90 days. The six ADLs are:

• Eating
• Toileting
• Transferring (moving in and out of a bed or chair)
• Bathing
• Dressing
• Continence

The second condition is the presence of a severe cognitive impairment, such as Alzheimer’s disease, that requires substantial supervision to protect the individual from threats to their health and safety.

Identifying Qualified Long Term Care Expenses

Qualified expenses fall into two main categories: premiums paid for qualified long-term care insurance and payments for qualified long-term care services. Both are considered medical expenses and are added together before applying the AGI limitation.

Qualified Long Term Care Insurance Premiums

Premiums paid for a “qualified” long-term care insurance contract can be included as medical expenses, but the deductible amount is subject to annual, age-based limits. For a policy to be qualified, it must be guaranteed renewable, meaning the insurance company cannot cancel the policy as long as premiums are paid.

Furthermore, the policy must not provide for a cash surrender value or other money that can be paid, assigned, or borrowed. Not all policies labeled as long-term care insurance meet the strict IRS definition of a qualified contract.

Qualified Long Term Care Services

Beyond insurance premiums, the direct costs of care services are also deductible. These are defined as necessary diagnostic, preventive, therapeutic, treating, and personal care services. These services must be provided pursuant to a plan of care prescribed by a licensed health care practitioner.

Deductible expenses can include payments for in-home care or costs for facilities like nursing homes. For facility-based care, the primary reason for the individual’s residency must be to receive medical care; if not, only the portion of the fees for medical care is deductible.

Calculating Your Potential Deduction

The calculation of the long-term care deduction involves multiple steps and depends on your AGI, age, and expenses. The process begins by determining your total medical expenses, including qualified long-term care insurance premiums and service costs. These amounts are then subjected to limitations.

The first limitation applies to long-term care insurance premiums. The amount of premiums you can include in your medical expense calculation is capped based on your age at the end of the tax year. For 2025, these limits are:

• $480 for age 40 or under
• $900 for ages 41 to 50
• $1,800 for ages 51 to 60
• $4,810 for ages 61 to 70
• $6,020 for age 71 and over

After applying the age-based premium limit, you combine that amount with your other qualified long-term care service costs and any other medical expenses. This total is then subject to the 7.5% AGI floor.

Consider a comprehensive example: A 65-year-old individual has an AGI of $100,000. They paid $5,000 in qualified long-term care insurance premiums and $10,000 for in-home nursing services. The premium deduction is limited to $4,810 for their age group in 2025. Their total includable medical expenses are $14,810 ($4,810 premium + $10,000 services). The AGI floor is $7,500 ($100,000 x 7.5%). The final deductible amount is $7,310 ($14,810 – $7,500).

How to Claim the Deduction on Your Tax Return

The method of claiming the deduction differs depending on whether you are an employee or a self-employed individual. For most taxpayers, the deduction is taken as an itemized deduction, while self-employed individuals may benefit from a more advantageous rule.

For taxpayers who itemize, the final calculated deductible amount for medical expenses is reported on Schedule A (Form 1040), Itemized Deductions. This amount is then combined with your other itemized deductions to reduce your taxable income.

Self-employed individuals have a special rule that allows for a more direct deduction of qualified long-term care insurance premiums. These individuals can deduct the eligible portion of their premiums, up to the age-based limits, as an adjustment to income on Schedule 1 (Form 1040). This is known as an “above-the-line” deduction, which means it is taken before calculating AGI.

This treatment is beneficial because it does not require the taxpayer to itemize their deductions, and the deduction for the premiums is not subject to the 7.5% AGI floor. Any long-term care service costs or premium amounts not deducted on Schedule 1 can still be included as a medical expense on Schedule A, subject to the standard limitations.