Is Long Term Care Insurance Tax Deductible?

You may be able to take a long term care insurance tax deduction. This will count on your tax forms as a medical expense, but the policy must first state whether it is a tax-qualified policy. Tax deductions for your long term care can come in a few different ways.

Long Term Care Costs and Expenses
Nursing home care is a tax deduction and can be itemized on your 1040 Schedule A form. It is important to keep in mind, however, that only medical costs that are more than 7 1/2% of your adjusted gross income may be deducted.

Long Term Care Insurance Benefits
A person who is paying into a long term care insurance policy may be able to deduct part of the premiums. The benefits that are being paid out are not a taxable income. However, anything paid to you under a non tax-qualified policy is taxable as income. The minimum benefit eligibility for a non tax qualified policy for people in a nursing home is not being able to participate in 2 out of 6 daily activities.

Long Term Care Insurance Premiums
You may itemize any premium that you are paying on a long term care insurance. Tax form Schedule A should be used. Any payments made by your employer is non taxable.

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