Utah · Long-Term Care · Taxes · 2026
Are Long-Term Care Costs Tax Deductible in Utah? (2026)
Some of it, some years — and almost none of the tax break comes from Utah. Here is what actually counts as a medical expense in 2026, the age cap on premiums, the floor you have to clear first, and the one Utah credit that quietly rewards a big care year.
The bottom line
- Premiums count, but capped by age. For 2026 a tax-qualified long-term care premium counts as medical care only up to $500 at 40 or under, rising to $6,200 above age 70 — per insured person (IRS Rev. Proc. 2025-32).
- Care costs count too — nursing home, and often assisted living or in-home care — when the person is chronically ill and receiving qualified long-term care services under a practitioner's plan of care.
- The floor is 7.5% of AGI, and you must itemize. On $95,000 of income, the first $7,125 of medical spending is worth nothing.
- Utah has no medical deduction at all. It has a flat rate — 4.45% for 2026 after S.B. 60 — and a taxpayer tax credit equal to 6% of your federal deduction. Deduct more federally, and Utah usually follows.
- New for 2026: employer plans may now allow a $2,600 penalty-free withdrawal to pay long-term care premiums — still taxable, and not available from an IRA (IRS Notice 2026-33).
The question usually arrives the spring after something happened. A spouse spent most of last year in memory care in Bountiful. A parent moved into assisted living in St. George in March and the bills ran to five figures. Somebody at church said it was all deductible. Somebody else said none of it was.
Both are wrong in the same way. Long-term care spending is one of the few expenses in a retiree's life that can produce a genuinely large deduction — but only in the years it is large, only if you itemize, and only after you clear a floor sized to your income. And in Utah, the state half of the answer looks nothing like the federal half, because Utah does not have deductions at all. It has a credit built on top of your federal number.
Here is the whole picture for the 2026 tax year: what counts, how much of it counts, what the floor does, how Utah's credit responds, and the new retirement-plan withdrawal that took effect at the end of 2025.
Which long-term care costs count as medical expenses?
Federal law treats two very different things as "medical care" here, and it helps to keep them separate in your head.
The first is the premium on a tax-qualified long-term care insurance contract. Most policies sold since 1997 are tax-qualified; your annual statement or the policy's first page will say so. The premium is medical care under IRC § 213(d)(10) — but subject to the age cap in the next section.
The second is the care itself. The IRS defines qualified long-term care services as necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, plus maintenance and personal care services, required by a chronically ill individual and provided under a plan of care prescribed by a licensed health care practitioner. That last category is the one that matters most in practice, because "maintenance or personal care services" is what an assisted living community actually sells: help with bathing, dressing, transferring, medication reminders, and protection from the hazards of severe cognitive impairment.
Alongside those two, ordinary retiree medical spending goes into the same bucket and helps you clear the floor: Medicare Part B premiums, Medicare Advantage and Part D premiums, Medigap premiums, dental and vision costs, hearing aids, prescriptions, and mileage to and from care. It all counts toward the same total.
How much of my premium can I actually count in 2026?
This is where most people overestimate. The premium is not deductible dollar-for-dollar. IRC § 213(d)(10) caps how much of it can be treated as medical care, and the cap is keyed to attained age before the close of the taxable year — how old you are on December 31.
Sources: IRS Rev. Proc. 2025-32, sections 4.27 and 4.62 — irs.gov — Rev. Proc. 2025-32 (PDF); IRS Topic no. 502 — irs.gov — Topic 502.
2026 limitation on eligible long-term care premiums includible in "medical care," per insured person. Source: IRS Rev. Proc. 2025-32, section 4.27.
| Attained age before the close of the taxable year | 2026 limit on eligible LTC premiums |
|---|---|
| 40 or less | $500 |
| More than 40 but not more than 50 | $930 |
| More than 50 but not more than 60 | $1,860 |
| More than 60 but not more than 70 | $4,960 |
| More than 70 | $6,200 |
Source: IRS Rev. Proc. 2025-32, section 4.27 (2026 adjusted items under IRC § 213(d)(10)) — irs.gov — Rev. Proc. 2025-32 (PDF).
Two features of this table are worth reading slowly. First, the caps are per insured person, so a married couple applies each spouse's own age. A 68-year-old and a 74-year-old in Ogden could count up to $4,960 plus $6,200 — $11,160 — in qualifying premiums for 2026, even if their policies were bought together. Second, the jump from the 51–60 band to the 61–70 band is more than double, which is one reason a premium that felt irrelevant at tax time in your fifties starts to matter in your sixties.
A note for the still-working: if you are self-employed, the picture is better. The self-employed health insurance deduction can include a qualified long-term care policy — still subject to the same age caps — and it is taken as an adjustment to income on Form 7206 rather than on Schedule A, which means no 7.5% floor and no need to itemize.
Is assisted living or memory care deductible?
Partly, usually — and the IRS draws the line at why the person is there, not at what the building is called.
The agency's own guidance is unusually plain: "If you, your spouse, or your dependent is in a nursing home primarily for medical care, then the nursing home cost not compensated for by insurance or otherwise (including meals and lodging) is deductible as a medical expense." And the flip side: "If that individual is in a home primarily for non-medical reasons, then only the cost of the actual medical care not compensated for by insurance or otherwise is deductible as a medical expense, not the cost of the meals and lodging."
Skilled nursing usually sits comfortably on the first side of that line. Assisted living and memory care are the harder cases, and they turn on the chronically-ill certification and plan of care described above. In practice:
- Get the certification in writing, dated, and renewed annually. The 12-month recertification requirement is easy to let lapse.
- Ask the community for an itemized statement separating the care/services component from rent and hospitality. Many Utah communities will produce one on request; some issue a year-end letter stating the medical percentage.
- Deduct only what was unreimbursed. If a long-term care policy paid $3,000 a month toward a $6,000 bill, the deductible expense is what you paid, not the whole invoice.
- Whose expense is it? You can deduct medical expenses you paid for a spouse or a dependent. Paying a parent's assisted living bill does not by itself make it your deduction — the dependency tests in Publication 502 have to be met.
Sources: IRS — Medical, nursing home, special care expenses (FAQ) — irs.gov — nursing home expenses; IRS Publication 502, Medical and Dental Expenses — irs.gov — Publication 502.
The floor: will you even clear it?
Everything above only matters after two hurdles. Medical expenses are deductible only to the extent they exceed 7.5% of adjusted gross income, and only if your total itemized deductions beat your standard deduction.
For 2026 the standard deduction is $32,200 married filing jointly and $16,100 for unmarried filers, plus an additional $1,650 for each spouse who is 65 or older or blind — increased to $2,050 for someone who is unmarried and not a surviving spouse. A retired couple in their seventies therefore starts with roughly $35,500 for free. Ordinary medical spending almost never beats that. A serious care year frequently does — and that lumpiness is the single most important planning fact in this article.
A worked example — hypothetical, not a quote
A Provo couple, both 72, with $95,000 of adjusted gross income. One spouse entered assisted living in March and stayed 10 months, certified chronically ill with a plan of care on file. Their 7.5% floor is $7,125.
| 2026 unreimbursed medical expenses | Amount |
|---|---|
| Assisted living, 10 months at Utah's 2024 median of $4,685/month | $46,850 |
| Long-term care insurance premiums, both spouses (each under the age-72 cap) | $7,200 |
| Medicare Part B premiums, both spouses (2026 standard rate) | $4,870 |
| Total medical expenses | $58,920 |
| Less the 7.5% floor on $95,000 of AGI | − $7,125 |
| Deductible medical expense on Schedule A | $51,795 |
Illustration only. Assisted living cost uses the Utah 2024 statewide median from CareScout; the Part B figure uses the 2026 standard premium of $202.9 a month from CMS. Premium amounts are hypothetical and both fall under the $6,200 age-72 cap.
Add $8,000 of property tax and charitable giving and their itemized total is $59,795, against a standard deduction of $35,500. Itemizing wins by $24,295. At a 12% marginal rate that is roughly $2,915 of federal tax. Then Utah adds to it — which is the part almost nobody sees coming.
Does Utah give me anything for long-term care costs?
Not directly, and it is worth being blunt about that. Utah taxes state taxable income at a flat rate — 4.5% on the return you filed this spring, and 4.45% for tax year 2026 after S.B. 60 passed the 2026 General Session with retrospective operation to January 1, 2026. There is no Utah itemized deduction for medical expenses, no Utah deduction for long-term care premiums, and no Utah long-term care credit.
What Utah has instead is the taxpayer tax credit under UCA § 59-10-1018, and it is built directly on your federal deduction. The TC-40 walks it in five steps: take your federal standard or itemized deduction, add Utah personal exemptions, subtract any state income tax you itemized federally, multiply by 6%, then reduce the result by 1.3 cents for every dollar of Utah taxable income above a base amount: $36,426 married filing jointly, $18,213 single or married filing separately, $27,320 head of household.
The Utah credit that does not cover long-term care
Utah also offers a Health Benefit Plan Credit (UCA § 59-10-1023) for people who bought their own health coverage and were not eligible for an employer or former-employer plan. Retirees ask about it constantly, and the answer for long-term care is no. The Tax Commission's definition of a health benefit plan expressly excludes "separate dental, vision, hearing, long-term care or home health plans," and also excludes Medicare supplemental insurance. Here is the actual map:
| Premium | Counts for Utah's Health Benefit Plan Credit? | Why |
|---|---|---|
| Long-term care insurance premiums | No | Separate long-term care plans are expressly outside Utah's definition of a health benefit plan. |
| Medicare supplement (Medigap) premiums | No | Listed by the Tax Commission as an excluded amount. |
| Medicare Part B premiums | Yes | Counts even when the premium is withheld from your Social Security check. |
| Medicare Advantage (Part C) premiums | Yes | Plans offered by private carriers approved by Medicare. |
| Medicare Part D drug plan premiums | Yes | Plans offered by private carriers approved by Medicare. |
| Anything you already deducted on federal Schedule A | No | Amounts deducted under IRC § 213 must be excluded — no double-dipping. |
The credit equals 4.5% of qualifying premiums, capped at $300 for a single taxpayer with no dependents, $600 married filing jointly with no dependents, and $900 for taxpayers with dependents. You do not qualify if you or your spouse had the option of employer coverage, even if you declined it. Source: Utah State Tax Commission, 2025 TC-40 Instructions, credit code 23 — tax.utah.gov — TC-40 Instructions (PDF).
Two more Utah credits sit nearby and are worth knowing, because you generally cannot stack them. The Retirement Credit (UCA § 59-10-1019) is up to $450 per person for taxpayers born on or before Dec. 31, 1952, phased out at 2.5 cents per dollar of modified AGI above $32,000 joint, $25,000 single. The Social Security Benefits Credit (UCA § 59-10-1042) applies the Utah rate to the federally taxable portion of your Social Security, phased out above $90,000 joint and $54,000 single. Utah's instructions are explicit that you may not claim the Retirement Credit if you claim the Social Security Benefits Credit or the Military Retirement Credit — run all three and take the largest.
New for 2026: pulling $2,600 from a 401(k) to pay the premium
This one is genuinely new, and most Utah retirees have not heard of it. Section 334 of the SECURE 2.0 Act added IRC § 401(a)(39), effective for distributions made after December 29, 2025, allowing employer defined contribution plans to make qualified long-term care distributions. The IRS issued implementing guidance in Notice 2026-33.
The amount is the least of three numbers: what you paid during the year for certified long-term care insurance covering you or your spouse; 10% of the present value of your vested accrued benefit under the plan; or $2,600, the inflation-adjusted 2026 version of the statute's $2,500 figure.
The details that decide whether this is useful to you:
- It waives the penalty, not the tax. IRC § 72(t)(2)(N) turns off the 10% additional tax on early distributions, but Notice 2026-33 states that a qualified long-term care distribution "is generally includible in gross income."
- IRAs are excluded. The notice is explicit: an IRA is not a plan eligible to make qualified long-term care distributions. This is a 401(k), 403(b), 457(b), and 401(a) feature.
- Your plan has to offer it. Nothing requires an employer to add the option, and many have not yet.
- The coverage has to qualify. The policy must provide "meaningful financial assistance" — which the statute says requires benefits adjusted for inflation and consumer protections, including protection if the coverage is terminated — and the issuer must have filed a long-term care premium statement with your plan.
- No three-year repayment, no rollover. Unlike birth/adoption or emergency personal expense distributions, this one cannot be repaid over three years, and it is not an eligible rollover distribution — so no mandatory 20% withholding, and no § 402(f) notice.
- Filing separately breaks it. If the distribution relates to coverage for a spouse and you file separate returns, the penalty exception does not apply.
Source: IRS Notice 2026-33, Guidance on Qualified Long-Term Care Distributions — irs.gov — Notice 2026-33 (PDF).
Are the benefits my policy pays taxable?
Generally not, with one ceiling to watch. A tax-qualified long-term care contract that reimburses actual care expenses pays benefits that are excluded from income without a dollar limit. A contract that pays a fixed per diem — a set amount per day regardless of what you spent — is capped: for calendar year 2026 the per diem limitation under IRC § 7702B(d)(4) is $430 a day. Above that, the excess is excludable only to the extent of actual unreimbursed costs. Your insurer reports the payments on Form 1099-LTC, and you reconcile on Form 8853.
The same rule runs in reverse on the deduction side: you can only deduct what you paid. Against Utah's 2024 medians of $4,685 a month for assisted living, $7,245 for a home health aide, and $10,646 for a private nursing home room, a policy paying a $200 daily benefit covers roughly $6,000 a month — the remainder is the part that lands on Schedule A.
A checklist for a heavy care year
- Decide early whether this is an itemizing year. Run the projection in October, not April. If a care event has pushed you past $35,500, other deductible spending you were going to do anyway is worth accelerating into the same year.
- Get the practitioner's certification and plan of care in the file — and renew it every 12 months. It is the document the personal-care portion of an assisted living deduction rests on.
- Ask the community for a year-end medical breakdown. Request it in writing before December; year-end is their busiest administrative stretch.
- Check both spouses' ages against the premium cap. A birthday that crosses 60 or 70 can move the countable premium by thousands.
- Add the easy-to-forget items. Part B and Part D premiums, Medigap premiums, dental and hearing costs, prescriptions, and medical mileage all count toward the same floor.
- Subtract every reimbursement. Policy benefits, Medicare payments, and Medicaid payments come off before you deduct.
- Check whether your old employer's plan added the $2,600 long-term care distribution before you take a taxable withdrawal the ordinary way. Ask the plan administrator, not the insurer.
- Compare Utah's three senior credits — Retirement, Social Security Benefits, Military Retirement — and claim the one worth the most. You cannot stack them. Questions go to the Utah State Tax Commission at (801) 297-2200 or (800) 662-4335.
- Take it to a tax professional. Everything above is general information about published rules; only your own return can answer your own question.
We will map what a long-term care event does to your withdrawals, your Medicare premiums, and your taxable income — in plain English, with no pressure. Education, not advice.
Talk to a planner →Frequently asked questions
Are long-term care insurance premiums tax deductible in Utah in 2026?
There is no Utah deduction for them, because Utah does not have its own itemized deductions. On your federal return, premiums on a tax-qualified long-term care policy count as medical care under IRC section 213(d)(10), but only up to an age-based cap. For 2026 the caps are $500 at age 40 or less, $930 above 40 through 50, $1,860 above 50 through 60, $4,960 above 60 through 70, and $6,200 above 70, per insured person (IRS Rev. Proc. 2025-32). The premium then joins your other medical expenses and is deductible only to the extent the total exceeds 7.5% of your adjusted gross income, and only if you itemize.
Is assisted living or memory care deductible?
It depends on why the person is there. The IRS says that if you, your spouse, or your dependent is in a nursing home primarily for medical care, the cost not compensated by insurance is deductible as a medical expense, including meals and lodging. If the person is in a home primarily for non-medical reasons, only the cost of the actual medical care is deductible, not the meals and lodging. For assisted living and memory care, the deduction generally rests on the resident being a chronically ill individual receiving qualified long-term care services under a plan of care prescribed by a licensed health care practitioner. Ask the community for a written breakdown of the medical portion of the bill.
How does the 7.5% floor work?
You add up your unreimbursed medical expenses for the year, then subtract 7.5% of your adjusted gross income. Only what is left is deductible, and only if your total itemized deductions beat your standard deduction. On $95,000 of AGI the floor is $7,125 — so the first $7,125 of medical spending produces no deduction at all. This is why a year with a major care event often produces a large deduction while ordinary years produce none.
Does Utah give any tax break for long-term care costs?
Not directly. Utah taxes state taxable income at a flat rate and does not allow itemized deductions. What Utah does allow is the taxpayer tax credit, which equals 6% of your federal standard or itemized deduction plus Utah personal exemptions, less state income tax you itemized federally, reduced by 1.3 cents for every dollar of income above a base amount ($36,426 married filing jointly, $18,213 single, $27,320 head of household). Because that credit is built on your federal deduction, a larger federal medical deduction generally produces a larger Utah credit — up to 6 cents per additional dollar, before phase-out. Utah's separate Health Benefit Plan Credit does not reach long-term care premiums.
Can I take money out of my 401(k) to pay long-term care premiums without the 10% penalty?
Starting with distributions made after December 29, 2025, section 334 of the SECURE 2.0 Act allows employer defined contribution plans to offer qualified long-term care distributions. The amount is the least of what you paid for certified long-term care insurance for yourself or your spouse during the year, 10% of the present value of your vested accrued benefit, or $2,600 for 2026. The 10% additional tax on early distributions does not apply, but IRS Notice 2026-33 is explicit that the distribution is generally still includible in gross income. IRAs are not eligible, plans are not required to offer the feature, and the coverage issuer must have filed a long-term care premium statement with the plan.
Are the benefits my long-term care policy pays taxable?
Benefits from a tax-qualified long-term care contract that reimburse actual care costs are generally not taxable. If the policy instead pays a fixed amount per day regardless of what you spent, the exclusion is capped: for calendar year 2026 the per diem limitation under IRC section 7702B(d)(4) is $430 a day (IRS Rev. Proc. 2025-32). Payments above that are excludable only to the extent of actual costs. You cannot also deduct care costs that a policy reimbursed — the medical expense deduction is only for unreimbursed amounts.
Sources
- IRS Rev. Proc. 2025-32 — section 4.27 (2026 eligible long-term care premium limits under IRC § 213(d)(10)), section 4.62 (the $430 per diem limitation under § 7702B(d)(4)), and section 4.14 (2026 standard deduction and the $1,650/$2,050 additional amounts for the aged or blind): irs.gov — Rev. Proc. 2025-32 (PDF)
- IRS Notice 2026-33 — Guidance on Qualified Long-Term Care Distributions (SECURE 2.0 Act § 334; IRC §§ 401(a)(39), 72(t)(2)(N), 6050Z; the $2,600 2026 limit, the 10% vested-benefit limit, the IRA exclusion, and the "generally includible in gross income" rule): irs.gov — Notice 2026-33 (PDF)
- IRS Topic no. 502, Medical and dental expenses (the 7.5% AGI floor; premiums covering medical care or qualified long-term care; Form 7206 for the self-employed): irs.gov — Topic 502
- IRS Publication 502, Medical and Dental Expenses (qualified long-term care services; the chronically-ill definition; maintenance and personal care services; whose expenses you may deduct): irs.gov — Publication 502
- IRS FAQ — Medical, nursing home, special care expenses (when meals and lodging are deductible and when only the medical portion is): irs.gov — nursing home expenses
- IRS — New and enhanced deductions for individuals, and Check your eligibility for the new enhanced deduction for seniors ($6,000 per eligible person for 2025–2028; available to itemizing and non-itemizing taxpayers; phase-out above $75,000/$150,000 of modified AGI): irs.gov — new and enhanced deductions
- Utah State Tax Commission — 2025 TC-40 Individual Income Tax Instructions (taxpayer tax credit at 6% with 1.3% phase-out and the $36,426/$18,213/$27,320 base amounts; Retirement Credit code 18; Social Security Benefits Credit code AH; Health Benefit Plan Credit code 23 and its exclusions): tax.utah.gov — TC-40 Instructions (PDF)
- Utah Legislature — S.B. 60, Income Tax Rate Amendments, 2026 General Session, enrolled copy (individual income tax rate of 4.45%, effective May 6, 2026 with retrospective operation for taxable years beginning on or after January 1, 2026): le.utah.gov — S.B. 60 enrolled (PDF)
- Utah State Tax Commission — Retirees and Seniors information hub: tax.utah.gov — retirees and seniors
- CMS — 2026 Medicare Parts A & B Premiums and Deductibles ($202.9 standard monthly Part B premium; $283 annual Part B deductible): cms.gov — 2026 Part B premiums
- CareScout (Genworth) Cost of Care Survey 2024 — Utah medians for assisted living, home health aide, and nursing home: carescout.com/cost-of-care
About this article. Written by the Utah Retirement Income Data Desk and reviewed by Brian Penner, Retirement income & long-term care planner. This is educational information about published federal and Utah tax rules — it is not tax, legal, or financial advice, not a recommendation to buy, keep, or change any policy, and not a substitute for a licensed tax professional reviewing your own return. Tax results depend on facts we do not know: your filing status, income, dependency relationships, what a policy reimbursed, and whether a plan of care and practitioner certification are in place. Dollar illustrations are hypothetical, are not quotes, and do not reflect any specific taxpayer, policy, or company. Cost-of-care figures are 2024 statewide medians, not a prediction of what your care will cost. Rules change; confirm current figures with the IRS, the Utah State Tax Commission at (801) 297-2200, and your own advisor before acting. Utah Retirement Income is a licensed independent insurance agency (NPN 16493717). We do not offer every plan available in your area, and we are not a government agency — we are not connected with or endorsed by the IRS, the Utah State Tax Commission, the Centers for Medicare & Medicaid Services, Utah Medicaid, the Social Security Administration, or the federal Medicare program. Insurance guarantees are subject to the claims-paying ability of the issuing company; there are no guaranteed investment returns and no promise of tax savings. If you call or text us, you consent to be contacted about your request; message and data rates may apply, and you can opt out at any time.