Long Term Care Expenses

[Mikecatman]

If you have a Long-term Care policy that has a per diem which is higher than the actual expense, I believe I need to claim the difference on Schedule 1. (Example - $100,000 in benefits with actual cost of $60,000 means claim $40,000 income on Schedule 1.) I'm guessing that the long-term care expense on schedule A should not be included as an itemized medical expense? 

[MaryK4 · Accepted solution]

Yes, any medical expenses you were reimbursed for should not be included as a medical deduction.  The income may not be just the amount you received but did not use.  To enter your 1099-LTC, go to 

1. Less Common Income.
2. Choose Miscellaneous Income, 1099-A, 1099-C / Start
3. Scroll down to Long-term care account distributions (Form 1099-LTC) , continue to follow the prompts.

The exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract is subject to a limit. The limit applies to the total of these payments and any accelerated death benefits made on a per diem or other periodic basis under a life insurance contract because the insured is chronically ill. 

Under this limit, the excludable amount for any period is figured by subtracting any reimbursement received (through insurance or otherwise) for the cost of qualified long-term care services during the period from the larger of the following amounts.

• The cost of qualified long-term care services during the period.

• The dollar amount for the period ($380 per day for any period in 2020).

See Qualified long-term care services.

[Mikecatman]

Thank you!

[groovycasa]

Can I deduct my Long Term Care premiums as medical expense?

[groovycasa]

Are they premiums deductible?

[ToddL99]

Yes, you can deduct the premiums for Long Term Care Insurance , but the deduction is subject to limitations. 

Premiums for qualified* long-term care insurance policies are deductible on your 2020 federal taxes (if you itemize) up to these per-person amounts. Like any other medical expense, you have to itemize to get the deduction.

• $430 — under age 41 as of December 31, 2020
• $810 — age 41–50 as of December 31, 2020
• $1,630 — age 51–60 as of December 31, 2020
• $4,350 — age 61–70 as of December 31, 2020
• $5,430 — age 71 or higher as of December 31, 2020

Some states also have their own long-term care credit or deduction; when you do your state taxes, we'll let you know if your state offers tax breaks for long-term care.

To deduct unreimbursed, out-of-pocket medical, dental, and vision costs on your federal return:

• You must take the itemized deduction;
• The expenses for you, your jointly-filing spouse, and your dependent(s) must exceed 7.5% of your AGI (adjusted gross income); and
• Only the portion above and beyond 7.5% of your AGI is deductible.

Where do I enter my long-term care premiums?