Did You Know LTC Insurance Has Tax Incentives?

Health Savings Accounts (HSA)

A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.

HSA money can reimburse tax qualified LTC insurance premiums based on the chart below. 

Attained Age in Tax Year 2021 Limitations on Premiums
Age 40 or less $450
Age 41 to 50 $850
Age 51 to 60 $1,690
Age 61 to 70 $4,520
Age 71 & older $5,640

LTC Tax Credits
or Deductions

Tax Incentives

Many states offer credits or deductions for LTC insurance premiums. See what your state offers here. 

 

Health Insurance Portability and Accountability Act of 1996 (HIPAA)
 

money

Favorable Tax Treatment of Qualified LTC Insurance Plans 

An individual and spouse are eligible to deduct a tax qualified LTC insurance premium under IRC 7702(B) as part of their medical expenses that exceeds 10% of adjusted gross income.
Generally, life insurnace with an LTC rider does not qualify.

The chart below shows the limit for the total amount of premiums deductions allowed based on age. 

Attained Age in Tax Year 2021 Limitations on Premiums
Age 40 or less $450
Age 41 to 50 $850
Age 51 to 60 $1,690
Age 61 to 70 $4,520
Age 71 & older $5,640

Tax qualifed LTC insurance provides tax free benefits up to $400 a day for 2021. 

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