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2009 Rules for Long-Term Care Premium Deductions

10-29-2008 - The IRS has issued rules for deductions taxpayers can take off their taxes for long-term care premiums in 2009.  The maximum amount that can be deducted depends on the age of the taxpayer at the end of the year. The deductibility limits for 2009 are as follows:

Attained Age Before Close of Taxable Year

Maximum Deduction

40 or less

$320

More than 40 but not more than 50

$600

More than 50 but not more than 60

$1,190

More than 60 but no more than 70

$3,180

More than 70

$3,980

To deduct premiums, they, along with other unreimbursed medical expenses, must exceed 7.5% of the insured's adjusted gross income.  Deductions may be taken for the taxpayer, his/her spouse and other dependents.

Also, the long-term care policy must be "qualifed." A policy issued after Jan. 1, 1997 is considered qualified if it adheres to regulations established by the National Association of Insurance Commissioners and offers inflation and nonforfeiture protection (whether or not the insured party chooses those options).  A policy purchased before Jan. 1, 1997 will be grandfathered in and treated as qualified so long as it has been approved by the insurance commissioner of the state in which it was sold.

More detailed information is available from the American Association for Long Term Care Insurance. You can also dowload an informational pdf from the Georgetown University Project for Long-term Care Financing.

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