Some tax advantages are available for tax qualified long term care insurance plans. These tax advantages are meant to be an incentive for people to take personal responsibility for their own long term care. You should always see a tax accountant to see if your plan qualifies and have them provide help in filing for the deductions.
Federal Level Deductions:
Federally, premiums fall under the category of “medical expense,” allowing them to qualify for a tax deduction. If your plan is a tax qualified long term care insurance plan and your premium or premium plus other medical expense is greater than 7.5% of the adjusted gross income, part of your premium could be considered tax deductible. You will have to be able to itemize for this deduction to be available to you. The requirements for federal level deductions typically change annually, so it is very important in this case to consult with a tax accountant or advisor.
Business Owner Deductions:
Some business owners have the ability to deduct the full cost of long term care insurance for themselves and designated individuals, including their spouse or partner. This deduction is taken as a business expense on the amount of the premiums paid.
State Deductions:
Some states will also offer a deduction or tax credit for long term care insurance premiums. A tax accountant will be able to provide specific information regarding the state you live in. In Ohio, there are available deductions for policy premiums.
