Remind your clients of tax incentives for owning LTCI
The 1996 Health Insurance Portability and Accountability Act (HIPAA) provides favorable tax treatment of premiums and benefits for qualified LTCi policies. The law allows taxpayers to deduct certain LTCi premiums and unreimbursed LTC expenses paid on behalf of themselves or their dependents. It also provides that employer-sponsored LTCi plans qualify for the same favorable tax treatment as health plans.
Additionally, 27 States offer tax credits or tax deductions for purchasing LTCI.
For example, in Minnesota, policyholders can receive up to a $100 tax credit each for owning the insurance. As a service to our MN clients, we send an annual reminder on the tax credit, and providing them with a downloadable version of the tax credit form.
Click here for a summary of states offering tax credits or deductions, a description of the incentive, and the state code or statute allowing the incentive.
Our own phones were ringing off the hook for a couple of days as clients called in to request the form.