Recognizing that government can't pay the bill for long-term care, federal and a number of state tax codes now offer tax incentives to encourage Americans to take personal responsibility for their future long-term care needs. The benefits of tax-qualified long term care insurance policies may be received tax-free by you, the policyholder. Your premiums for long-term care insurance may be tax deductible along with other individual medical expenses.
Premiums paid for tax-qualified LTC insurance are deductible if paid for the individual taxpayer themselves, his/her spouse, or any dependent. While premiums are deductible, though, the amount of the deduction is limited.
You may not know if you qualify…
- How do you know if you're entitled to this nonrefundable credit? You would be entitled to a tax credit if you or your business pay premiums for qualifying long-term care insurance policies.
- How much is the credit? The allowable credit is 20% of the premiums paid during the tax year for the purchase of, or for continuing coverage under a qualifying long-term care insurance policy.
For additional information on claiming this credit, see:
- Form CT-249, Claim for Long-Term Care Insurance Credit (for corporations); or
- Form IT-249, Claim for Long-Term Care Insurance Credit, and its instructions, Form IT-249-I (for all others)
2019 Federal Deduction Premiums for TQ Plans
If, for any reason, the premiums combined with other uninsurable medical expenses meet or exceed 10% of adjusted gross income, the deduction amount will be as follows:
CONTACT ME with any questions you have about whether you qualify.
None of the information on this page should be considered as tax advice. You should consult your tax advisor for information concerning your individual situation.