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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Question Nursing home insurance policy tax deductible on

Resolved Question:

Question: Nursing home insurance policy tax deductible on your schedule A?     
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

Premiums paid for qualified long term care are deductible on Schedule A up to certain limits. For the long term care contract to be qualified it must meet the following conditions:

  • 1. Be guaranteed renewable,
  • 2. Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed,
  • 3. Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and
  • 4. Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses.

The amount of qualified long-term care premiums you can include is limited. You can include the following as medical expenses on Schedule A (Form 1040):

  • a. Age 40 or under - $290.
  • b. Age 41 to 50 - $550.
  • c. Age 51 to 60 - $1,110.
  • d. Age 61 to 70 - $2,950.
  • e. Age 71 or over - $3,680

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Expert:  Merlo replied 8 years ago.

One additional thing I forgot to mention.

When you itemize deductions, the cost of your long-term care insurance policy premiums, when added with other non-covered medical expenses must exceed 7.5 percent of your AGI, or adjusted gross income before a deduction is allowed.

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