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NAIFA's Limited & Extended Care Planning Center

The LECP Center empowers professionals to network with solution and service providers to share best practices, directly access subject matter experts, research, training and resources; and provide thought leadership so we may continue to address the changing needs of the market.

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Tax Advantages of Long-Term Care Insurance

By ARM on 11/13/19 11:40 AM

Long-Term Care Awareness Month conversations should always include a mention of the tax advantages of Long-Term Care insurance [LTCi]. For those looking for a last-minute tax deduction, LTCi presents a solution.

LTCi is considered Health Insurance for tax purposes, which has favorable implications for owners of C-Corporations and S-Corporations alike.

  • C-Corporations who fund an LTCi benefit for owners/employees and their spouses or dependents, can fully deduct premiums paid as a business expense
  • S-Corporations who purchase LTCi for the owner and their spouse or dependents can deduct premiums up to the federally set Eligible Premium limits

What’s more – regardless of organizational structure, benefits received from an LTCi policy are tax free!

Non-business owners can reap the tax benefits of LTCi policies too. Tax-qualified LTCi premiums can be reimbursed through a Health Savings Account [HSA], tax-free, up to the age based Eligible Premium limits.

See below for the age-based EligiTable Premium limits.

Eligible Premium Limits for 2019

At age:  You can deduct:
40 & Younger $420
41-50 $790
51-60 $1,580
61-70 $4220
71 and older $5,270