State Tax Incentives for Long-term Care Insurance

A deduction is allowed for the amount of premiums paid pursuant to a qualifying insurance contract for qualified long-term care coverage.

"Eligible" LTCI premiums may be a deductible as medical expenses when such premiums are paid towards "qualified" LTCI is set forth in IRC Sec. 7702B(b)(1). This deduction for unreimbursed medical expenses exceed 7.5% of the taxpayer's AGI. (e.g same deduction allowed federally)

Permits the same tax deduction as is allowed for federal income tax purposes for premiums paid for the purchase of qualified LTCI.

State income tgax credit equal to the lesser of 25% of premiums paid for an LTCI plicy or $150.00 per policy. Individuals who qualify for the credit are those with federal taxable income less than $50,000 ($100,000 joint filers claiming a credit for 2 policies). A LTCI policy must meet Colorado's definition of long-term care.

A deduction in the amount an indivdual pays annually in premiums paid for LTCI is permitted from gross income, provided that the deduction not exceed $500,000 per year, per individual, whether the individual files individually or jointly. An LTCI policy must meet the District of Columbia's definition of long-term care.

An individual state tax deduction is allowed for LTCI premiums. This deduction is limited in the same manner as the deduction on the federal level, and is also only availavle to the extent that all medical expenses, including long-term care, exceed 7.5% of Hawaii Adjusted Gross Income instead of the Federal Adjusted Gross Income.

Premiums paid during the taxable year , by a taxpayer for LTCI, which LTCI is to be for the benefit of the taxspayer, a dependent of the taxpayer or an employee of the taxpayer, may be deducted from taxable income to the extent that the premium is not otherwise deducted or accounted for by the taxpeyer for Idaho income tax purposes. The deduction may be taken for a federally tax-qualified LTCI policy meeting Idaho's definition of LTCI.

For tax years beginning on or after January 1, 2000, an individual taxpayer is permitted to deduct an amount equal to the eligible portion of premiums paid during the taxable year by the taxpayer for a qualified long-term care policy (as defined in the Indiana Code, for the taxpayer, the taxpayer's spouse, or both FOR QUALIFIED PARTNERSHIP POLICIES ONLY. [Ind. Code Secs. 6-3-1-3.5 and 12-15-39.6.5 (Aualified Long-Term Care Policy)

Permits tax deduction from net income for premiums paid for LTCI coverage for nursing home coverage to the same extent allowable under federal law and to the extent not otherwise deducted in computing Adjusted Gross Income.

HB 2545 permits tax deduction from net income for premiums paid for qualified LTCI for up to $500. The total deduction amount will increaseby $100 for each tax year until December 31, 2009; a deduction not exceeding $1,000 of the premium costs for all taxable years commencing after December 31,2009.

A taxpayer may exclude from Kentucky Adjusted Gross Income any amounts paid for long-term care insurance as defined in the Kentucky code. [Ky. Rev. Stats. Sec. 141.010(10)(m) Reg. 304.14-600 & 610]

A deduction is allowed for an amount equal to the total premium spent for insurance policies for long-term care that have been certified by the Superintendent of Insurance as complying with Title 24-A, Chapter 68. For tax years beginning on or after 1/1/04, a taxpayer may tax a state income tax deduction an amount equal to the total premiums spent for LTC insurance, as long as the amount subtracted is reduced by any amount claimed as a deduction for federal income tax purposes. [36 Me. Rev. Stat. Sec. 5122] Amended 5/11/04 [Title 36, Part 8, Chapter 805, Sec. 5122 (1989)]

For employers, a credit is allowed against the tax imposed for each taxable year equal to the lowest of the following: (A) $5,000; (B) 20% of the costs incurred by the taxpayer in providing long-term care policy coverage as part of the benefit package; or, (C) $100 for each employee covered by an employer provided long-term care policy. [Title 36, Part 4, Section 2525, Chapter 357 (1996)]

To qualify for the credit, the insured must be all of tghe follwoing:
* A spouce, parent, stepparent, child or stepchild.
* A Maryland resident.
For tax year 2009, you can claim a credit equal to the premiums paid, up to a maximum of $320 for each insuraed person 40 years of age or younger, and up to a maximaum of $500 for each insured person 41 or older. This tax credit must not have been claimed for the insured by you or anyhone else in any other tax year.

An employer may claim a credit equal to 5% of the costs incurred during the taxsable year to provide LTCI as part of an employee benefit plan. The credit may not exceed the lesser of of $5,000 or $100 for each employee covered by the LTCI. The credit may only be applied against one tax if the employer is subject to one tax against which the credit is allowed. If the credit is more than the tax liability, the uinused credit may be carried forward for the next five tax years

For tax years beginning on or after January 1, 1999 a credit is allowed for long-term care insurance premiums during the taxable year equal to (1) 25% of premiums paid to the extent not deducted in determining federal taxable income; or, (2) $100. Maximum allowable credit per year is $200 for couples filing jointly and $100 for all other filers. Any unused tax credit may not be carried forward to future tax years. No credit is allowed if the taxpayer deducted the premium amounts when net taxable income was calculated or the premiums were excluded from net taxable income.

As of January 1, 2007, a taxpayer is allowed a credit against the income taxes imposed under this chapter in an amount equal to 25% of the premium costs paid during the taxable year for a qualified long-term care insurance policy as defined in Section 7702B of the Internal Revenue Code that offers coverage to either the individual, the individual's spouse, the individual's parent or parent-in-law, or the individual's dependent as defined in Section 152 of the Internal Revenue Code. No taxpayer is entitled to the credit with respect to the same expended amounts for qualified long-term care insurance which are claimed by another taxpayer. The credit allowed by this section shall not exceed $500 or the taxpayer's income tax liability, whichever is less, for each qualified long-term care insurance policy. Any unused tax credit shall not be allowed to be carried forward to apply to the taxpayer's succeeding year's tax liability. No credit shall be allowed under this section with respect to any premium for qualified long0term care insurance either deducted or subtracted by the taxpayer in arriving at his net taxable income under this section or with respect to any premiums for qualified long-term care insurance which were excluded from his net taxable income.

Beginning January 1, 2007, this bill authorizes 100% of the amount paid for non reimbursed qualified long-term care insurance premiums to be deducted from a taxpayer's Missouri taxable income to the extent the amount is not already included in the taxpayer's itemized deductions. SB 577 (SECTION 135.096] Formerly, a deduction was allowed for a resident from state taxable income for an amount equal to fifty percent of all non reimbursed amounts paid by an individual for qualified long-term care insurance premiums to the extent such amounts are not included in the individual's itemized deductions for all taxable years beginning after December 31, 1999. [Section 8 of R.S. MO 334660 (1999)] [Mo. Rev Sat. SEc. 135.096] Secs. 376.951-376.958 of Missouri Long-Term Care Insurance Act.]

Participants may deduct up to $1,000 ($2,000 filing jointly) from their federal adjusted gross income for Nebraska state income tax purposes by depositing an equal amount into a designated Long-Term Care Savings Plan account at a participating financial institution. (LB 965 - 1/1/06) LB 305 approved may 30, 2007 for anyone turning 50 in 2007, benefits Nebraskans by strengthening Nebraska's Long Term Care Savings Plan by 1) Allowing a participant to pay a long-term care insurance policy premium for another person for whom the taxpayer has an insurable interest; 2) Allowing a person who turned 50 during the taxable year to make payments for long-term care insurance premiums during the taxable year. (These Legislative Bills amend Section 77-6102 of Nebraska State Law).

Allows a deduction for medical expenses (including long-term care insurance premiums), only to the extent such expenses exceed 2% of taxpayer's gross income. [N.J. Stat. Sec. 54A:3-3]

Permits deduction for premium paid for qualified long-term care insurance contract defined in Internal Revenue Code section 7702(B), as part of unreimbursed or uncompensated medical care expenses. Total medical expense deduction is limited, based on income level. [N.M. Stat. Ann. sec. 7-2-35]

A credit is allowed equal to 20% of the premium paid during the taxable year for long-term care insurance approved by the Superintendent of Insurance provided policy qualifies for such credit pursuant to Section 1117. If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax fro such year or years and applies to taxable years beginning on or after January 1, 2004. [Sec. 210, subdivision 25-0-1 Chapter 58 (2004)] [NY Tax Law SEc. 606(aa)]

A credit is allowed to be applied against an individual's tax liability in the amount of 25% of any premiums paid by the taxpayer for long-term care insurance coverage for the taxpayer or the taxpayer's spouse, parent, step-parent or child. The credit may not exceed $100 in any taxable year. [Title 57, Chapter 57-38 (1997)]

A deduction is allowed for individual policy premiums paid for qualified long-term care insurance effective for taxable years beginning January 1, 1999. Generally allows a deduction for the amount paid for qualified long-term care insurance for the taxpayer, his spouse, and dependents [OH REV. STAT. Section 5747.01 (1999)]

A deduction is allowed from federal taxable income of a resident or nonresident individual for tax years beginning on or after January 1, 2000, of any amounts paid for premiums on long-term care insurance policies to the extent the amounts paid were not deducted under Section 213 of the Internal Revenue Code in determining federal taxable income. This deduction is for all premiums paid for long-term care insurance as defined under the Utah Code. [Chapter 60, ' 59-10-114(1999)][Utah Code Sec. 59-10-114(2)(K) Sec. 31A-1-301]

If the tax-qualified policy was purchased after January 1, 2006, an individual may be eligible for a tax credit equal to 15% of the total premiums paid in the year for the first 12 months of coverage. Certain limitations apply. Other credits maybe available for previously purchased policies.