NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 10% of your Adjusted Gross Income (AGI), and only the amount above the 10% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on page one of Form 1040 as part of the "Self Employed Health Insurance Deduction" (Line 29).  This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations.  (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)

CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI.

​* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice.  Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.

The state of Washington has passed the first of its kind government-run LTC insurance program for working residents of the state.

The plan will provide $100 per day of benefits which will increase with inflation for a maximum of 365 days (1-year).  Each day of benefits is considered a "unit" of coverage and units can be combined to pay for care services above $100/day, but that would also shorten the total benefit period.  The benefit can be used to pay family members to provide care after they have completed a minimum amount of mandatory training.

Every employee in the state will have a payroll tax withholding to pay for the plan.  The tax is 0.58%, or $0.58 for every $100 in payroll income.  A person earning $4,000 per month would pay $23.20 per month.

The plan does not cover people already retired or who will retire in the next 6 to 10 years.  It also is not portable if an employee leaves the state of Washington.

Payroll deductions will not begin for 3 years, and no benefits will be paid for at least 3 years after that as the plan requires that employees pay in for a minimum of 3 of the previous 6 years to be eligible.  To be fully "vested" in the plan an employee must pay in for at least 10 years.

"Self employed" people will not be automatically covered, but can opt-into the plan at the same payroll tax rate.

​Employees who have private LTC insurance can opt-out of the tax and coverage.