Deduct Expenses for Long-Term Care on Your Income Tax Return

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last updated 13 August 2024

The need for long-term care can happen at any point in your life, and the costs can be daunting.

According to the U.S. Department of Health and Human Services, among those turning 65 between 2021 and 2025, more than half (56%) can anticipate having at least some significant need for long-term care. The agency estimates that the average individual turning 65 will incur $120,900 in future long-term care costs.

While public programs and private insurance may reduce some costs, more than one-third of families can expect to pay out-of-pocket. About 14% are expected to spend at least $100,000 out-of-pocket expenses. That can be a hard pill to swallow.

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Fortunately, there are ways to recoup some of those expenses.

If you require long-term care, you may be able to deduct some of the costs on your tax return. For those who purchased a long-term care insurance policy to cover costs, you may be able to deduct a portion of your premium payments.

Here’s how to get some of that cash back into your pockets.

Who is eligible for long-term care tax deductions?

In many cases, you’ll have to foot the bill for long-term care expenses. But the IRS allows you to deduct some of these unreimbursed costs as a medical expense.

To be eligible for this tax break, the long-term care service must be medically necessary by a licensed healthcare practitioner. You can deduct these expenses for your spouse, a dependent, or yourself — but to qualify, the individual must fall under one of these categories:

The care must be for a chronically ill person, meaning a licensed healthcare practitioner certified that they are unable to perform at least two activities of daily living without substantial assistance from another person for at least 90 days due to loss of some functional capacity.
Some examples include eating, bathing, or dressing. Also, the condition must be certified within the last year.
The care is necessary for someone with a severe cognitive impairment, meaning they require substantial supervision to be protected from threats to their health and safety.

What kind of long-term care medical expenses can I claim on my tax return?

According to the IRS, "qualifying medical expenses" for long-term care can include preventive, therapeutic, treating, mitigating, curing, or rehabilitative services. Expenses for in-home, assisted living, and nursing-home services are also tax deductible. (See IRS Publication 502 for a full list of qualifying services.)

One interesting point: The cost of admission to medical conferences may be tax deductible if the conference is related to a chronic illness causing the need for long-term care for yourself, your spouse, or your dependent. However, keep in mind, that the cost of meals and lodging while attending the conference isn’t deductible as a medical expense.

How to deduct long-term care expenses

To claim the deduction for long-term care expenses, you must itemize deductions on your tax return on your Schedule A (Form 1040).

As mentioned, you can generally claim tax deductions on medical expenses for yourself, your spouse, or a dependent. This can include the cost of care for a parent if they become your dependent.

Here's how it generally breaks down:

Out-of-pocket tax deductions on long-term care services are just that — an unreimbursed medical expense you had to pay with your personal funds.
Private Insurance premiums are allowed a limited tax deduction for certain long-term care insurance premiums, which can be included as an itemized deduction for medical expenses.

So how does it work? Deductions for out-of-pocket medical expenses or insurance premiums apply only for expenses not covered by your insurance and both are deductible to the extent the expenses exceed 7.5% of your adjusted gross income (AGI) for the year.

The medical deduction for long-term care premiums also carries an age-related cap. For the 2023 tax year, the IRS limit increased to the following:

Age 40 or under: $480
Age 41 to 50: $890
Age 51 to 60: $1,790
Age 61 to 70: $4,770
Age 71 and over: $5,960

Are Medicare costs tax deductible?

What you pay in Medicare premiums is also generally deductible from your tax return under certain circumstances, and that will depend on the Medicare program you are in.

Medicare Part A premiums can be deducted from your tax return if you meet the following conditions:

You voluntarily enrolled in Medicare A.
You aren’t covered under Social Security.

Medicare Part B and Medicare Part D are both considered supplemental insurance, so any expenses that exceed 7.5% of your AGI for the year can be reported as itemized medical expenses on Schedule A of your federal income tax return.

These tax deductions are also subject to the age-related cap mentioned earlier.

This tax break gets better as you age, but you can start saving now

With long-term care tax deductions the amount of cash you get back will get better as you age, but until your next birthday — there are some other ways you can cut costs.

One popular strategy is to buy a long-term care insurance policy. Generally, the younger you are, the cheaper your insurance premium will be. You can purchase the policy as a preventive measure, but just be aware that the cost of your premium will increase as you age.

Another way to reduce costs is to share your long-term care insurance policy with your spouse. A joint policy can be cheaper, and allow you in many cases to pool benefits. If one spouse runs out of their benefit, they can use their partner’s share.

If you need more advice about long-term care and saving money on those costs, talk to your financial advisor. They can help you figure out cost-saving measures, or how to properly itemize your expenses ahead of the next tax-filing deadline.

Gabriella Cruz-Martínez is a seasoned finance journalist with 8 years of experience covering consumer debt, economic policy, and tax. Before joining Kiplinger as a tax writer, her in-depth reporting and analysis were featured in Yahoo Finance. She contributed to national dialogues on fiscal responsibility, market trends and economic reforms involving family tax credits, housing accessibility, banking regulations, student loan debt, and inflation.

Gabriella’s work has also appeared in Money Magazine, The Hyde Park Herald, and the Journal Gazette & Times-Courier. As a reporter and journalist, she enjoys writing stories that empower people from diverse backgrounds about their finances no matter their stage in life.