Criteria for Federal and New York State Income Tax Deduction for Long Term Care Insurance

by David Goldfarb

Many people know that they should purchase long-term care insurance, but the high cost of policies prohibit them from taking the next step. Despite the expense, this insurance coverage not only protects you, your loved ones, and your estate, but it also may provide certain tax benefits as well. The method and extent of the tax write off will depend on certain factors, including your age and your employment status.


For W-2 employees, the tax benefits of long-term care insurance materialize as an itemized deduction on Schedule A of a 1040 tax return. Specifically, you may deduct part of the premiums you paid as a medical expense. The requirements to take this deduction include:

  • You itemize your taxes
  • Your premiums (combined with any other qualified medical expenses) constitute more than 10 percent of your adjusted gross income


The self-employed are not subject to the requirement that premiums exceed 10 percent of adjusted gross income. Instead, you can deduct as much as 100 percent of your premiums up to the maximum thresholds (see below) on page one of your 1040 as a business expense along with the medical, dental, and other qualifying insurance premiums you pay for you and your immediate family.

How Much Can You Deduct?

The maximum amount you can deduct from your taxes for long-term care insurance depends on your age at the end of the tax year (listed below for 2017—and please note that these maximum thresholds increase each year).

  • Age 40 and younger – $410
  • Age 41 to 50 – $770
  • Age 51 to 60 – $1,530
  • Age 61 to 70 – $4,090
  • 70 and older – $5,110

 New York State Tax Credits

Residents of New York State can also benefit from a long-term care insurance-related credit on state returns. You can get a credit for 20 percent of the premiums you paid, though the following conditions apply:

  • The credit is not refundable
  • The credit may not reduce your tax liability below the minimum tax due
  • You can carry over any credit that exceeds your tax liability to the next year

While long-term care insurance costs a lot of money, it only gets more expensive the more you age. Therefore, lock in a lower premium before you think you will ever need to use the coverage—and take the benefit from such coverage on your federal and state taxes. Policies must be guaranteed renewable. The insured has a right to continue the insurance by paying the premiums, and the insurer cannot change the policy, except that premiums may be revised by the insurer on a class basis. Insurers require medical underwriting. In other words, a person may be excluded from obtaining a policy because of prior medical conditions. Exclusions are usually geared toward those conditions that are likely to lead to an extended need for nursing home and home care. Insurance companies vary as to what conditions will exclude an applicant from coverage. Therefore, inquiries to more than one company or through an independent agent would be prudent.

Consult With a New York Long Term Care and Estate Planning Attorney Today

For questions about long-term care insurance or any other future planning, do not hesitate to discuss your situation with an experienced New York estate planning lawyer. We can help you develop a comprehensive estate plan to protect you and your family. Call Goldfarb Abrandt Salzman & Kutzin LLP at (212) 387-8400 or contact our office online.