IRS Issues Long-Term Care Premium Deductibility Limits for 2022, and they Look Pretty Familiar

The Internal Revenue Service (IRS) has announced the amounts taxpayers of different ages can deduct from their 2022 income as a result of buying long-term care insurance, and the figures are almost the same as in 2021.

Many types of medical expenses are deductible from your taxes. To claim the deduction, your total unreimbursed medical expenses (which can include premiums for “qualified” long-term care insurance policies), have to be more than 7.5 percent of your adjusted gross income in 2022.

As long as the long-term care insurance policy is “qualified” (see below), these premiums — what the policyholder pays the insurance company to keep the policy in force — are deductible for the taxpayer, his or her spouse, and other dependents. If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed a certain percentage of your income. The tax deduction is generally not available with so-called hybrid policies, such as life insurance and annuity policies with a long-term care benefit. 

There is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for the tax year 2022. They are the same as in 2021, with the exception that for those in the age 60 to 70 age range the IRS reduced the limit by $10, from $1,420 to $1,410.  Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year
Maximum deduction for year

40 or less       $450

More than 40 but not more than 50       $850

More than 50 but not more than 60    $1,690

More than 60 but not more than 70        $4,510

More than 70                 $5,640

Another change announced by the IRS involves benefits from per diem or indemnity policies, which pay a predetermined amount each day. These benefits are not included in income except for amounts that exceed the beneficiary’s total qualified long-term care expenses or $390 per day, whichever is greater.
For these and other inflation adjustments from the IRS, click here.  

Image of a paved road in the middle of a beautiful park or residential complex that has pine and other trees and lots of pink, white and purple wildflowers growing next to the paved road. A grandfather who is wearing glasses is pushing his granddaughter on her pink bike. The granddaughter is about 4 or 5 and is wearing a bike helmet with pink flowers and has long blond hair. This image is shown in conjunction with our Braintree estate planning firm's blog post about long term care insurance and long term care planning.

What Is A “Qualified” Long-term Care Insurance Policy?

To be “qualified,” policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of “inflation” and “nonforfeiture” protection, although the consumer can choose not to purchase these features. Policies purchased before January 1, 1997, will be grandfathered and treated as “qualified” as long as they have been approved by the insurance commissioner of the state in which they are sold.