Often, and partly. The rules are more favourable than people expect in one situation and less helpful than they hope in another.

The basic rule

Premiums for a tax-qualified long-term care policy can be treated as a medical expense. Not all policies are tax-qualified, so that is the first thing to establish about any policy you own or are considering.

The age-based limit

You cannot treat the whole premium as a medical expense. The IRS sets an annual cap that rises with age, in bands, and adjusts those figures each year for inflation. The band that applies is based on your age at the end of the tax year, and for a married couple each spouse's limit is set by their own age.

We deliberately do not publish the dollar figures here. They change annually and the published figures vary between secondary sources; the authoritative version is the IRS revenue procedure for the tax year in question, and your tax adviser will have it.

The threshold most people have to clear

If you itemise, medical expenses are only deductible above a percentage of your adjusted gross income. Your long-term care premium joins your other unreimbursed medical costs and only the amount above that floor counts. For many households with ordinary medical spending, that floor means the deduction does not end up producing a benefit.

Where it gets genuinely useful

If you are self-employed — a sole proprietor, a partner, or a more-than-2% shareholder in an S corporation — long-term care premiums are generally treated as an adjustment to income rather than an itemised deduction, up to the same age-based cap. That means the income floor does not apply, and the benefit is real rather than theoretical.

This is one of the few places where being self-employed makes an insurance decision materially cheaper, and it is worth raising with your accountant before you buy rather than afterward.

What we are not

The Jordan Insurance Agency is an insurance agency, not a tax adviser. We will tell you whether a policy is tax-qualified and point you at the right question; the filing decision belongs with your accountant.

Related: what drives the premium in the first place, how long-term care insurance works, and whether it is worth it for you.