California lets you deduct qualified long-term care insurance premiums as a medical expense on both your federal and state returns, up to an age-based cap that reaches $6,200 per person in 2026. The deduction only helps if you itemize and if your total medical expenses clear 7.5% of your adjusted gross income. Self-employed Californians get a much better deal: an above-the-line deduction with no AGI floor. The rules below cover what you can deduct, how to claim it, and the policy conditions that have to be met first.
2026 Age-Based Premium Deduction Limits
The IRS caps how much long-term care premium you can treat as a deductible medical expense each year, based on your age at the end of the tax year. For 2026 the limits are:1Internal Revenue Service. Rev. Proc. 2025-32 – 2026 Adjusted Items
- Age 40 or younger: $500
- Age 41 to 50: $930
- Age 51 to 60: $1,860
- Age 61 to 70: $4,960
- Age 71 or older: $6,200
These are per-person figures. A married couple both over 70 can include up to $12,400 in deductible LTC premiums between them. If your actual premium is lower than your age-bracket cap, you deduct only what you paid. The limits adjust yearly for inflation, so pull the current numbers each filing season.
How To Claim the Deduction on a California Return
California conforms to the federal treatment. You include qualifying long-term care premiums, up to the age-based cap, with your other medical expenses, and the total only becomes deductible to the extent it exceeds 7.5% of your federal adjusted gross income.2Franchise Tax Board. Deductions The same 7.5% floor applies on both the federal Schedule A and California’s Schedule CA.3Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
You have to itemize to claim it. Because California’s standard deduction is considerably lower than the federal one, some filers take the standard deduction federally but still come out ahead itemizing on their state return. Add up everything medical for the year — premiums, copays, prescriptions, dental, other unreimbursed costs — and run the numbers both ways.
California does not offer a separate state credit for buying long-term care insurance. The itemized medical expense deduction is the entire state tax benefit.
Self-Employed Filers Get a Much Better Deduction
If you’re self-employed, long-term care premiums fall under the self-employed health insurance deduction. That’s an above-the-line deduction that reduces your adjusted gross income directly, with no itemizing and no 7.5% floor to clear.4Internal Revenue Service. Instructions for Form 7206 The same age-based premium caps still apply, but the practical value is far greater because every dollar within the cap actually reduces your taxable income.
You calculate the deduction on Form 7206 and report it on Schedule 1. One rule to watch: premiums you deduct this way cannot also be included in itemized medical expenses on Schedule A. It’s one or the other for the same dollar of premium.
Paying Premiums From an HSA
Health Savings Account funds can be used to pay qualified long-term care premiums tax-free, up to the same age-based limits.5Internal Revenue Service. Eligible Long-Term Care Premium Limits LTC is one of the few insurance premiums an HSA is allowed to cover. A withdrawal within your age-bracket cap carries no tax and no penalty. Someone over 70 pulling $6,200 from an HSA to cover a year’s premium gets the full amount out tax-free, with no itemizing required.
Your Policy Has To Be Qualified
None of the tax treatment above applies unless your policy is a qualified long-term care insurance contract under federal law. A qualified contract can only cover qualified long-term care services, must be guaranteed renewable, and cannot have a cash surrender value or let you borrow against it.6Office of the Law Revision Counsel. 26 U.S. Code 7702B – Treatment of Qualified Long-Term Care Insurance Policies sold after 1996 generally meet these conditions, but older or non-standard policies should be confirmed with the insurer.
The policy also has to pay out based on the federal definition of a chronically ill individual: a licensed health care practitioner must certify that you cannot perform at least two of six activities of daily living (eating, bathing, dressing, toileting, transferring, continence) for at least 90 days, or that you need substantial supervision because of severe cognitive impairment.6Office of the Law Revision Counsel. 26 U.S. Code 7702B – Treatment of Qualified Long-Term Care Insurance The certification must be renewed at least annually.
Hold a non-qualified policy and the consequences cut both ways. Premiums are not deductible at all, through any route. Benefits paid out are taxable as ordinary income. Check your policy documents for a reference to Section 7702B or language identifying it as a tax-qualified contract, and call your insurer if it isn’t clear.
Hybrid Life and Long-Term Care Policies
Hybrid policies that combine life insurance with a long-term care rider follow more complicated rules. Whether you can deduct anything depends on whether the policy separately identifies the premium allocated to the LTC component.
When the policy does break out that figure, the LTC portion is deductible subject to the same age-based caps and the 7.5% AGI threshold. The life insurance portion is never deductible. If your hybrid policy doesn’t clearly allocate the LTC premium, you may not be able to claim anything. Ask the insurer for a premium allocation statement before filing.
Tax on Benefits You Receive
The deduction side is only half the picture. How benefits are taxed when you actually start collecting them depends on how your policy pays.
Reimbursement policies that pay you back for actual care expenses produce tax-free benefits, regardless of amount. The IRS treats the reimbursement as a wash against what you spent.
Per diem (indemnity) policies pay a fixed daily amount regardless of your actual costs. Those payments are tax-free up to a daily cap, which is $430 per day for 2026.1Internal Revenue Service. Rev. Proc. 2025-32 – 2026 Adjusted Items Anything above $430 per day is taxable as income unless you can show your actual care costs were higher. Your insurer will issue Form 1099-LTC reporting what was paid during the year, and you’ll sort out the taxable portion on your return.7Internal Revenue Service. Instructions for Form 1099-LTC Keep receipts from facilities, home health agencies, and medical providers so you can substantiate costs that exceed the per diem cap.
Hybrid policy benefits paid for long-term care generally get the same treatment: tax-free when they reimburse actual costs, tax-free per diem up to the $430 daily limit.
If Your Employer Pays the Premium
Premiums paid by your employer for long-term care coverage are generally excluded from your taxable income. The employer deducts them as a business expense, and you don’t report the coverage as compensation. The exception is coverage provided through a flexible spending arrangement, in which case the premiums are included in your gross income.
The California Partnership Program Is Not a Tax Deduction
California’s Partnership for Long-Term Care often comes up alongside the deduction question, but it isn’t a tax benefit. It’s a Medi-Cal asset protection program.8DHCS. California Partnership for Long-Term Care For every dollar a Partnership policy pays out in benefits, you can shield a dollar of assets from Medi-Cal’s spend-down requirements, and those protected assets are also disregarded during estate recovery after your death.9DHCS. Understanding the Partnership Policy
Partnership policies must include built-in inflation protection: 5% compound, 5% simple, or 3% compound annual increases to the daily benefit.10California Partnership for Long-Term Care. What Happens When Long-Term Care Costs Rise A Partnership policy that qualifies under Section 7702B gets the same premium deduction as any other qualified contract. The Partnership designation itself does not change the deduction.