Part of our guide: Long-Term Care Insurance: Costs, Options and Planning →
Tax benefits may not be the first thing you mention about long-term care insurance, but they should be in your top five. For hesitant clients and business owners, they can tip the decision.
Key takeaways
- Premiums for tax-qualified LTC policies can count as medical expenses, up to IRS age-based limits.
- Self-employed clients can often deduct premiums up to those limits; C-corporations can generally deduct premiums paid for employees in full.
- Many states offer their own deduction or credit, and HSA funds can pay qualified premiums up to the age-based limits.
A C-corporation can generally deduct 100% of long-term care premiums it pays for employees and their spouses.
1. Individuals: medical expense deduction
Premiums for tax-qualified long-term care policies count as medical expenses, up to an age-based “eligible premium” limit the IRS sets each year. Clients who itemize can include them with other medical expenses above the income threshold. Clients can also pay qualified premiums from a health savings account, up to the same limits.
2. Self-employed clients
Self-employed clients can generally deduct qualified premiums, up to the age-based limits, as part of the self-employed health insurance deduction, without needing to itemize.
3. Business owners
When a C-corporation buys tax-qualified policies for employees and their spouses or dependents, it can generally deduct the full premium as a business expense, and the benefit isn’t taxable income to the employee. That makes LTC a strong executive benefit. See controlled executive bonus with LTC benefits.
4. State incentives
Many states offer a deduction or credit for LTC premiums. Rules and amounts vary by state and change over time, so check your client’s state. Existing policyholders often don’t know about these benefits, which makes the annual review a good time to mention them.
Frequently asked questions
Are long-term care insurance premiums tax deductible?
Premiums for tax-qualified policies can be deductible as medical expenses up to IRS age-based limits, and business owners may have additional deductions.
Can I use my HSA to pay long-term care premiums?
Yes, for tax-qualified policies, up to the IRS age-based eligible premium limits.
Can a business deduct long-term care insurance premiums?
A C-corporation can generally deduct 100% of premiums paid for employees. Other business types have different rules, so confirm with a tax advisor.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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