Taxpayers who hold qualified long-term-care insurance policies can count a portion of their premiums as deductible medical expenses, but the amount they can claim each year depends on how old they are. Federal law sets age-based caps that rise in five tiers, giving older policyholders a larger eligible amount. With the 2025 tax year filing window now open, the interaction between these caps and the standard medical-expense threshold is directly shaping how much value filers of different ages can extract from their coverage costs.
Age-based caps and the Schedule A threshold for LTC premiums
The legal foundation sits in two sections of the Internal Revenue Code. Section 7702B defines what counts as a qualified long-term care insurance contract. Only policies meeting that statutory definition receive favorable tax treatment. A contract that falls outside those requirements produces no deductible premium, regardless of the policyholder’s age or health status.
The dollar limits themselves come from a separate provision. Section 213 establishes the age-based annual ceiling on eligible long-term care premiums that can be treated as medical expenses. The caps increase across five attained-age brackets, so a filer over 60 can include a substantially larger share of annual premiums than someone under 40. Even after applying those caps, the deductible amount only produces a tax benefit to the extent that total medical expenses on Schedule A exceed 7.5 percent of adjusted gross income.
That two-step filter matters. A younger policyholder faces both a lower cap and, typically, fewer other medical costs to push past the AGI floor. An older filer, by contrast, often combines a higher eligible premium with larger out-of-pocket health spending, making the deduction far more likely to produce real savings. The structural tilt toward older cohorts is not incidental; it reflects the reality that long-term care premiums rise steeply with age, and Congress designed the caps to track that cost curve while still limiting how much can be written off each year.
How the IRS applies the deduction rules for 2025 filings
IRS Publication 502 for the 2025 tax year confirms that premiums for qualified long-term care insurance can be included with deductible medical expenses, subject to the age-based limits. The publication explains that only the portion of premiums up to the statutory cap for the taxpayer’s age counts toward medical expenses, and that any excess premium is simply nondeductible. The agency’s training materials, used by Volunteer Income Tax Assistance preparers, list the specific eligible premium limits by attained age in tabular form so volunteers can quickly determine how much of a client’s premium qualifies.
Self-employed individuals get an additional path. The IRS notes in its Topic 502 summary that qualified long-term care premiums may also factor into the self-employed health insurance deduction, which is taken as an adjustment to income rather than an itemized deduction. That distinction is significant: the adjustment reduces AGI directly, benefiting the filer even if they do not itemize. For self-employed taxpayers who also itemize, the same premium dollars cannot be counted twice, but the choice of which route to use can change the bottom-line result, especially if the Schedule A medical expenses would not otherwise clear the 7.5 percent threshold.
The IRS Tax Guide for Seniors, Publication 554, reinforces the same treatment and directs older filers to the age-based limit schedule. Taken together, these publications emphasize three practical steps: confirm that the policy is a qualified long-term care contract under federal law, apply the correct age-based cap to determine the eligible premium, and then decide whether to claim that amount as part of itemized medical expenses or, for eligible self-employed filers, as an above-the-line health insurance deduction.
Planning around the long-term care premium limits
The age-based structure creates both challenges and opportunities for taxpayers trying to manage long-term care costs. For workers in their 40s and 50s, premiums are often lower but so are the caps, and many households do not have enough other medical expenses to surpass the 7.5 percent of AGI hurdle. In that situation, the deduction may provide little or no immediate benefit, and the policy decision tends to rest more on risk management than on tax savings.
For retirees and near-retirees, the picture can look different. Premiums tend to be higher, but so are the allowable caps, and out-of-pocket expenses such as prescription drugs, dental work, and copayments stack on top of long-term care premiums when calculating Schedule A totals. Those combined costs make it more likely that the filer will exceed the AGI floor and actually see a tax reduction from their policy payments. Older self-employed individuals may see even more benefit if they can use the health insurance adjustment to income instead of itemizing.
The rules also affect timing decisions. Because the age-based caps are determined by attained age at the end of the tax year, crossing into a higher age bracket can increase the amount of premium that qualifies as a medical expense. Taxpayers contemplating policy changes or considering whether to accelerate or delay premium payments sometimes weigh how those moves will interact with the caps and the medical-expense threshold in a given year.
Ultimately, the long-term care premium deduction is a targeted benefit rather than a blanket subsidy. The combination of statutory definitions, age-based caps, and the 7.5 percent AGI floor means that taxpayers must run the numbers carefully to see whether their premiums will actually reduce their tax bill. For those who qualify, however, the interaction of these rules can meaningfully offset the cost of protecting against long-term care risks later in life.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
