At 65, Dad Will Pay $6,290 for LTC Insurance at 72 and Expects a Tax Break as IRS Raises Premium Limit. Only the Part Above 7.5% of His $80,000 Income Counts. Nearly All $6,290 Comes From His Nest Egg
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Picture a 72-year-old dad who writes a check for $6,290 to cover a year of qualified long-term care (LTC) insurance. He’s heard the IRS rewards older buyers, and he’s right that the 2027 premium limit for anyone over 70 is exactly $6,290. So he assumes the higher limit means a big tax break at filing time.
Federal law allows a medical deduction only for expenses that exceed 7.5% of adjusted gross income (AGI). Give Dad $80,000 of adjusted gross income (AGI), and that floor is $6,000. If the premium is his only qualifying medical expense, just $290 sits above the threshold, and even that is deductible only if he itemizes. His nest egg covers the rest, the same way it covers the electric bill.
What the $6,290 “Eligible Long-Term Care Premiums” Limit Really Means
The number comes from IRS Revenue Procedure 2026-35, released on November 5, 2026. It sets the 2027 age-based limits on how much qualified long-term care insurance premium can count as a medical expense:
- Age 51 to 60: $1,890
- Age 61 to 70: $5,030
- Over 70: $6,290
That’s a ceiling on how much premium the IRS lets you count as a medical expense. Whether any of it becomes an actual deduction depends on two more tests. If Dad pays more than that each year, he still counts only $6,290. The cap also applies per person, so a married couple who are both over 70 can each count up to their own limit.
The policy has to qualify, too. IRS rules require it to be guaranteed renewable, and it can’t offer a cash surrender value that can be paid out, pledged or borrowed against. A policy that doesn’t qualify doesn’t get this federal tax treatment, no matter the buyer’s age.
Why $80,000 of Income Leaves Only $290 to Deduct
The 7.5% floor works like a deductible on a tax break. At $80,000 of AGI, the first $6,000 of qualifying medical expenses produces no deduction. If the premium is Dad’s only qualifying expense, just $290 sits above the line.
His other medical costs change that. Medicare premiums he pays himself, along with dental work, hearing aids, prescriptions and other qualifying expenses, can stack on top of the long-term care premium and push more of his spending above the 7.5% floor.
Medicare leaves a gap, though, and that gap is why Dad bought the policy in the first place. Medicaid, the state-run program serving those with low income and few assets, covers nursing homes, but only once a family has spent its savings down.
Why His Nest Egg May Still Fund Nearly All of It
The medical deduction sits on Schedule A, so it only pays off if Dad’s total itemized deductions beat the standard deduction. For 2027, the standard deduction is $16,600 for single taxpayers and $33,200 for married couples filing jointly. Because Dad is over 65, an unmarried filer who isn’t a surviving spouse gets another $2,100.
A retiree with a paid-off house and modest state taxes may not get past that hurdle. If Dad takes the standard deduction, his $6,290 premium gives him zero federal tax relief.
The money has to come from somewhere. The average retired worker’s Social Security check comes to $2,170 a month after the 2027 cost-of-living adjustment (COLA), so Dad could reach $80,000 through a mix of retirement income, IRA withdrawals, a pension or investments. If Dad takes out the premium from a traditional IRA, that withdrawal counts as income. It increases his AGI, and it pushes his 7.5% floor higher at the same time.
State Credits Can Beat the Federal Break
State tax treatment varies widely. New York gives residents a credit equal to twenty percent[1] of long-term care premiums. The credit tops out at $1,500[1], and it’s available when New York AGI stays under $250,000. On a $6,290 premium, that’s $1,258 off his tax bill, with no 7.5% floor in the way. The policy must still qualify under the state’s insurance law. Other states offer a deduction or nothing at all, so the same policy costs Dad a different net price depending on where he lives.
Dad may still value the coverage, but the federal tax break plays a bit part. What it’s worth comes down to three things: his total medical bills, his AGI, and whether itemizing beats the standard deduction. A year with surgery or paid in-home care can change all three fast, because unreimbursed qualified long-term care services count as medical expenses too.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
