Long-term care planning · Taxes · Mesa County, Colorado

Is Long-Term Care Insurance Tax Deductible in 2026?

Yes — up to an age-based cap the IRS just raised to $4,960 for people 61 to 70 and $6,200 for people over 70. Whether that cap turns into money on your return depends entirely on which of five doors you walk through, and for most retired Mesa County households the front door, Schedule A, is the one that stays shut.

Medicare On Main Data Desk

Published September 16, 2026 · 10 min read · Reviewed by Brian Penner, 22+ years in Medicare

The question usually arrives in October, from a client's CPA. The long-term care policy has been in force a few years, the premium notice has just landed, and someone wants to know whether the government is sharing the cost. The short answer is yes, in the sense that Congress made qualified long-term care premiums a medical expense back in 1996. The useful answer is longer, because the deduction lives behind a cap and a floor and a standard deduction, and the people who actually collect it are almost never the ones itemizing on Schedule A. This is the version we walk through at the Grand Junction office — the 2026 numbers from the IRS's own revenue procedure, the five doors in order of how often they pay, the hybrid-policy trap, and the Colorado credit almost nobody in our client base qualifies for. It is education, not tax advice; your CPA gets the last word.

The 2026 limits, and who set them

Section 213(d)(10) of the tax code lets you count "eligible long-term care premiums" as medical care, but only up to a dollar amount that depends on your age, indexed each year. The IRS published the 2026 figures on October 9, 2025 in Rev. Proc. 2025-32, the same document that sets the year's tax brackets and standard deduction. Age is "attained age before the close of the taxable year" — where you are on December 31, not when you paid the premium.

Sources: IRS Rev. Proc. 2025-32 — 2026 inflation adjustments, §3.27 eligible long-term care premiums and §3.62 per diem limit; IRS Publication 502 — Medical and Dental Expenses (Qualified Long-Term Care Insurance Contracts). Per person; Publication 502: "The limit on premiums is for each person."

Two things to notice. The cap is per person, so a couple counts two caps — one at 68 and one at 72 can count up to $11,160 between them for 2026. And the cap is on the premium you can count, not on the deduction: a policy that costs more than the cap is fine, but the excess is simply not a medical expense in the IRS's eyes. We do not quote long-term care premiums on this site, because they depend on age at purchase, health, benefit period, inflation rider and carrier; the caps are the only numbers here, and they are the IRS's.

What makes a policy "qualified"

The cap applies only to a qualified long-term care insurance contract, defined in 26 U.S.C. § 7702B. The statute requires that "the only insurance protection provided under such contract is coverage of qualified long-term care services," that the contract "is guaranteed renewable," that it "does not provide for a cash surrender value," and that it does not pay for things Medicare would reimburse. Publication 502 restates the same four tests in plain English. Almost every stand-alone long-term care policy sold in Colorado since the late 1990s is written to meet them, and the policy or its outline of coverage will say "intended to be a qualified long-term care insurance contract under section 7702B(b)." If yours does not say it, ask.

"Qualified long-term care services" is the other defined term, and it is the reason these policies exist at all. Section 7702B(c) covers care "required by a chronically ill individual" under a plan of care, and a chronically ill individual is someone a licensed practitioner has certified as "being unable to perform (without substantial assistance from another individual) at least 2 activities of daily living for a period of at least 90 days" — eating, toileting, transferring, bathing, dressing, continence — or as "requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment." That is custodial care, and Medicare.gov is blunt about it: "Medicare doesn't pay for long-term care," the page is headed "Not Covered · You pay all costs," and it defines long-term care as "medical and non-medical care for people who have a chronic illness or disability." Our Grand Junction long-term care post covers what Medicare does pay — up to 100 skilled days after a qualifying hospital stay — and where that leaves a Mesa County household.

Five doors, in the order they actually pay

Sources: IRS Topic No. 502 — Medical and Dental Expenses; IRS Publication 969 — Health Savings Accounts (insurance premiums an HSA may pay); IRS Publication 575 — Pension and Annuity Income (Insurance Premiums for Retired Public Safety Officers); C.R.S. § 39-22-122 — Long-term care insurance credit.

Door one: Schedule A, where the cap meets the floor

This is the door every article means when it says "deductible," and it is the one that pays least often. The capped premium goes on the medical line of Schedule A next to your Part B premium ($202.90 a month at the 2026 standard rate), your Medigap or Advantage premium, Part D, dental, hearing aids and everything else. Then Topic 502 applies the floor: you deduct only "to the extent these expenses exceed 7.5% of your adjusted gross income for the year." Then the whole Schedule A — medical above the floor, state and local taxes, mortgage interest, charity — has to beat the standard deduction, $32,200 for a joint return and $16,100 for a single filer in 2026, before it is worth a dollar. Here is the floor against the most a couple aged 68 and 72 could count for long-term care premiums, assuming their premiums are at or above the caps:

Illustration. The floor is 7.5% of AGI per IRS Topic 502; the right-hand column is the 2026 per-person cap for one spouse aged 61–70 plus one aged 71 or older, per Rev. Proc. 2025-32. Actual premiums vary and are not quoted.

Read the table the way a CPA would. At $80,000 of AGI, the two caps clear the floor by about $5,000 — and only that $5,000, plus every other medical dollar above the floor, goes to Schedule A, where it then has to help the household past $32,200. At $160,000 the caps do not reach the floor at all; the long-term care premiums are entirely "deductible" and entirely useless on their own, and only a year with big uncovered medical bills — a memory-care admission, a hearing-aid and dental year, a hospital stay — changes that. This is why the honest answer is "deductible, rarely deducted." The households whose income makes a long-term care policy affordable are the ones the 7.5% floor is built to exclude.

Doors two and three: above the line, and out of the HSA

The self-employed health insurance deduction is the exception that pays, and it is more common in Mesa County than a coastal tax blog assumes. Topic 502 describes it as "an adjustment to income, rather than an itemized deduction, for premiums you paid on a health insurance policy covering medical care, including a qualified long-term care insurance policy for yourself, your spouse, and dependents." An adjustment to income comes off before AGI, so there is no 7.5% floor, you keep the standard deduction, and — the part higher-income retirees should hear twice — a lower AGI two years from now is a lower IRMAA bracket. The 2026 surcharge thresholds are $109,000 single and $218,000 joint, and a Schedule A deduction never touches them because it lands after AGI is set; an above-the-line deduction does. The age cap still applies, the deduction cannot exceed net self-employment earnings, and it is off for any month you were eligible for an employer's subsidized plan. The orchard on Schedule F, the consulting LLC, the couple whose short-term rental is run as a business — bring the policy to the CPA and ask this question by name.

The HSA is the other clean door. Publication 969 says "You may not use HSA funds to pay for insurance, except for the following," and lists four exceptions — the first is "Long-term care insurance," and the publication adds that those premiums "are subject to limits based on age and are adjusted annually." Tax-free money out, up to the cap, no itemizing, no floor, no income test. The account cannot be refilled once you are on Medicare (Pub. 969: your contribution limit is zero from the first month of enrollment), so a retiree with a six-figure HSA built during working years has a choice each January: pay the long-term care premium from the HSA and leave the IRA alone, or pay it from a taxable IRA withdrawal that raises AGI and, two years later, possibly the Part B premium. For a household near an IRMAA line, that is not a small choice. Our HSA and Medicare post covers the enrollment timing that decides how large the account gets to be.

Door four: the public safety officer exclusion

This one is narrow and, in a county with its own sheriff's office, fire departments and a state patrol troop, worth knowing. Publication 575 lets "an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew who is retired because of disability or because you reached normal retirement age)" exclude from income "distributions made from your eligible retirement plan that are used to pay the premiums for coverage by an accident or health plan or a long-term care insurance contract" — "the smaller of the amount of the insurance premiums or $3,000." The distribution has to come from the governmental plan you retired from, it can be paid to you or straight to the insurer, and the publication is explicit that "The amount excluded from your income can't be used to claim a medical expense deduction." An exclusion from income is the same kind of animal as an above-the-line deduction for IRMAA purposes: it never reaches AGI. If you retired from a Colorado PERA-covered department, ask the plan how it handles the election.

Door five: Colorado's credit

Colorado is one of the states with its own incentive, and it is worth describing accurately because it gets oversold. C.R.S. § 39-22-122 allows "a credit against the income taxes due" equal to "twenty-five percent of the amount expended" on long-term care insurance for yourself or your spouse — but only for "an individual filing a single return with a federal taxable income of less than fifty thousand dollars," a joint return under $50,000 claiming one policy, or a joint return under $100,000 claiming two policies, and "the amount of credit claimed pursuant to this section shall not exceed one hundred fifty dollars for each policy." It is non-refundable and does not carry forward. So the ceiling is $150 per policy, $300 for a couple with two, and only under income limits that most households paying for a long-term care policy have already passed. If you qualify, it goes on the Colorado return; if you do not, nothing about it should change whether you own the policy.

The hybrid-policy trap

A large share of the long-term care coverage sold in the last decade is not a stand-alone policy but a rider on a life insurance or annuity contract — "hybrid" or "linked-benefit" coverage, where the long-term care benefit accelerates or extends the death benefit. The tax code handles these in § 7702B(e), and the two halves of that subsection point in opposite directions. Paragraph (1) says the code applies "as if the portion of the contract providing such coverage is a separate contract," which is what lets a qualified rider pay benefits tax-free. Paragraph (2) then says: "No deduction shall be allowed under section 213(a) for any payment made for coverage under a qualified long-term care insurance contract if such payment is made as a charge against the cash surrender value of a life insurance contract or the cash value of an annuity contract." Most hybrids fund the rider exactly that way — a monthly charge drawn from the policy's cash value — so the premium door is closed even though the benefit door is open.

Publication 502 leaves a narrow path. For "a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement." Some carriers will issue that statement; some riders are billed as a separately identified premium rather than a cash-value charge. Two questions settle it, and both belong to the carrier in writing: is the rider a section 7702B qualified long-term care rider or a section 101(g) chronic-illness rider, and is the long-term care charge separately stated? A 101(g) rider is a fine thing to own, but it is not long-term care insurance for tax purposes, and its charges are not eligible premiums under any door on this page. We do not name products or carriers and will not tell you which to buy; we will tell you to get that letter before you tell your CPA anything.

The bigger tax fact: the benefits

If the premium deduction is the small print, the benefit rule is the headline. Benefits from a qualified policy that reimburse actual care are treated like health-insurance reimbursements — not income. Policies that pay a flat daily or monthly amount regardless of what you spent are tax-free up to a per diem limit, which Rev. Proc. 2025-32 sets at $430 a day for 2026, or your actual qualified long-term care expenses if higher. The insurer reports what it paid on Form 1099-LTC; the form is a report, not a bill. Put the two rules side by side and the shape of the deal is clear: the government gives back little or nothing on the way in for most retirees, and takes nothing on the way out at the moment the money matters, in a stage of life where Medicare pays for none of the care in question and a Medigap policy — as Medicare.gov's long-term care page notes — pays for none of it either. That is the reason to own the policy. The deduction is a courtesy.

Two Medicare-side reminders before this leaves your desk. First, a long-term care premium paid from a taxable IRA withdrawal raises the income that sets your Part B and Part D surcharge two years later; paid from an HSA or through a business deduction, it does not — the same premium, two different Medicare bills. Second, the cap rises every year with inflation and your bracket changes when you cross 70, so the number your CPA used last year is wrong this year; the 2026 table above is the one to hand over. Everything else — whether to itemize, whether the self-employed deduction applies to your particular Schedule C, how the exclusion interacts with a PERA benefit — is your tax advisor's call, and we say so at the kitchen table too.

How we know all this: the Medicare On Main Data Desk frames every article with public data. The 2026 age-based limits and the $430 per diem figure are quoted from IRS Rev. Proc. 2025-32 (October 9, 2025), and the 2025 limits and the "for each person" rule from IRS Publication 502; the 7.5%-of-AGI floor and the self-employed health insurance deduction language are quoted from IRS Topic No. 502; the HSA premium exception from IRS Publication 969; the retired public safety officer exclusion from IRS Publication 575; the qualified-contract, chronically-ill and hybrid-rider rules from 26 U.S.C. § 7702B as published by Cornell's Legal Information Institute; the Colorado credit from C.R.S. § 39-22-122; the standard deduction and IRMAA thresholds from the same revenue procedure and CMS's November 14, 2025 fact sheet; and Medicare's non-coverage of long-term care from Medicare.gov. No premium, rate, product or carrier is stated, because long-term care insurance is not a Medicare product and this is education, not tax or financial advice — review any policy with a licensed professional and any deduction with your tax advisor. Medicare On Main is a licensed independent insurance agency. We do not offer every plan available in your area. Any information we provide is limited to the plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. We take no payment from any carrier to feature a plan, and no carrier on this page is endorsed.