Long-Term Care Insurance Tax Deduction: 2026 Limits and Rules

Premiums you pay for a tax-qualified long-term care insurance policy count as a medical expense under federal law, so a long-term care insurance tax deduction is available, but the amount you can actually write off is capped by your age. For 2026 the per-person limits run from $500 if you’re 40 or younger to $6,200 if you’re 71 or older. Whether that cap turns into real tax savings depends on how you file. Self-employed people get the cleaner deal because they deduct premiums above the line. Everyone else has to itemize and clear the 7.5% adjusted gross income floor first.

2026 Age-Based Deduction Limits

Federal law caps the deductible premium based on the insured person’s age at the end of the tax year. The caps are adjusted annually for inflation under IRC Section 213(d)(10).¹ For 2026:

Age 40 or younger: $500
Age 41 to 50: $930
Age 51 to 60: $1,860
Age 61 to 70: $4,960
Age 71 or older: $6,200

The limit applies per insured person, not per policy. If you and your spouse both carry coverage, each of you gets your own age-based cap, and premiums you pay for a qualifying dependent count too under their own limit.² Anything you pay above the cap is a personal expense with no federal tax benefit. The age that controls is whatever you reach before December 31, not the age you were when you bought the policy.

The Policy Has to Be Tax-Qualified

None of this works unless the contract itself meets the requirements in Internal Revenue Code Section 7702B.³ A qualifying policy must be guaranteed renewable, must carry no cash surrender value, cannot be borrowed against, and cannot reimburse expenses already covered by Medicare. Dividends and premium refunds have to reduce future premiums or increase future benefits rather than pay out in cash.

Benefits can only be triggered for a person a licensed health care practitioner has certified as “chronically ill” within the past 12 months, meaning the person cannot perform at least two activities of daily living without substantial help for at least 90 days, or requires substantial supervision because of severe cognitive impairment.³ If your insurer hasn’t confirmed in writing that the policy is tax-qualified under 7702B, ask before you claim anything.

How Employees and Retirees Claim the Deduction

If you’re not self-employed, eligible premiums go on Schedule A as an itemized medical expense. That puts two hurdles in front of the deduction.

First, the 7.5% floor. Add your premium (up to the age-based cap) to every other unreimbursed medical and dental cost you paid during the year. Only the portion of that total that exceeds 7.5% of your adjusted gross income is deductible.² At an AGI of $80,000, the first $6,000 of medical spending produces nothing.

Second, the standard deduction. For 2026 that’s $16,100 for single filers and $32,200 for married couples filing jointly.⁴ Itemizing helps only when your total itemized deductions, including the medical amount above the 7.5% floor plus state and local taxes, mortgage interest, and charitable gifts, exceed the standard deduction. For a lot of filers, especially those without heavy medical costs, the math doesn’t get there. Where it does tend to pay off is for older taxpayers with high premiums and significant other medical expenses in the same year.

The Self-Employed Get a Better Deal

Self-employed taxpayers can deduct eligible long-term care premiums as an adjustment to gross income rather than an itemized deduction. There’s no 7.5% floor, and you don’t have to itemize to claim it. The deduction lands on Schedule 1, line 17.⁵

This path is open to sole proprietors, partners with self-employment income, and more-than-2% S-corporation shareholders whose health premiums appear as wages on their W-2.⁶ The age-based caps still apply. Two other limits also apply: the deduction can’t exceed your net self-employment income for the year, and you can’t claim it for any month you were eligible to join a subsidized health plan through your spouse’s employer, even if you didn’t enroll.

Calculate the amount on Form 7206 and carry the result to Schedule 1.⁷

C-Corporation Owner-Employees

A C-corporation that pays long-term care premiums for its employees, their spouses, or their dependents deducts 100% of the premiums as a business expense, with no age-based caps, and the premiums are excluded from the employee’s taxable income. The corporation can limit coverage to a class of employees defined by factors like officer status or years of service rather than stock ownership. For an owner-employee, this is one of the most tax-efficient ways to fund the coverage.

Hybrid Life and Long-Term Care Policies Usually Don’t Qualify

Combination policies that bundle life insurance with long-term care coverage have grown popular, and most of them do not produce a premium deduction. Many are structured under IRC Section 101(g), which governs accelerated death benefits, rather than Section 7702B.³ Policies built under 101(g) generate no premium deduction at all.

Some hybrid contracts do include a separately identified long-term care rider that meets 7702B standards. When that’s the case, only the portion of the premium allocated to that rider is potentially deductible, still under the age caps. Ask the insurer whether there is a 7702B-qualified component with a separately stated premium before assuming any deduction is available.

Paying Premiums Through an HSA

Funds in a Health Savings Account can pay qualified long-term care insurance premiums up to the same age-based limits, and those distributions count as tax-free qualified medical expenses because eligible premiums are treated as medical care under IRC Section 213(d).¹ Anything you pull from an HSA above the cap becomes a non-qualified distribution, subject to income tax and a 20% penalty if you’re under 65.

Health care Flexible Spending Accounts are a different story. FSAs cannot pay long-term care insurance premiums at all; the IRS specifically excludes both insurance premiums and long-term care from eligible FSA expenses.⁸

How the Benefits Themselves Are Taxed

If your policy ever pays out, those benefits are generally excluded from gross income, but there’s a cap on per diem or indemnity policies. Under IRC Section 7702B(d), when a policy pays a fixed daily amount regardless of actual expenses, the tax-free amount is limited to the greater of your actual long-term care costs or a daily per diem figure, which is $430 for 2026.³ Anything above both those figures is taxable.

Reimbursement-style policies that pay based on actual expenses incurred don’t hit this cap as long as benefits stay within what you actually spent. Whatever the payout structure, the insurer will send you Form 1099-LTC reporting the year’s benefits.⁹

State Deductions and Credits

About half the states offer their own income tax deduction or credit for long-term care premiums on top of the federal treatment. The design varies. Some states give a percentage credit, commonly in the 15% to 25% range; others use a flat deduction or a one-time credit; some have separate incentives for employers who cover their workers. Check your state’s rules or ask a tax professional, because a state benefit can matter even in years the federal deduction doesn’t help.

Filing: Forms and Records

Employees and retirees who itemize report the eligible premium on Schedule A with the rest of their medical costs.¹⁰ Self-employed filers use Form 7206 and report the result on Schedule 1, line 17.⁷

Before you file, pull together the annual premium statement from your insurer, written confirmation that the policy is tax-qualified under Section 7702B, and each covered person’s age as of December 31 so you can apply the right cap. If any benefits were paid during the year, review the 1099-LTC to decide whether any portion is taxable.⁹

1
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
2
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
3
Office of the Law Revision Counsel. 26 USC 7702B – Treatment of Qualified Long-Term Care Insurance
4
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
5
Internal Revenue Service. Form 1040 Schedule 1 – Additional Income and Adjustments to Income
6
Internal Revenue Service. 2025 Instructions for Form 7206
7
Internal Revenue Service. Instructions for Form 7206 (2025)
8
Internal Revenue Service. Health Savings Accounts and Other Tax-Favored Health Plans
9
Internal Revenue Service. Instructions for Form 1099-LTC
10
Internal Revenue Service. Instructions for Schedule A (Form 1040)