Tax-qualified Long Term Care policies have significant tax advantages for individuals, as well as business owners and their employees. Individual taxpayers can treat premiums paid for a tax-qualified Long Term Care insurance policy for themselves, their spouse or their partner as a personal medical expense.
For C Corporations, the total premium of a long term care policy is deductible as a business expense.
S Corporations, Sole proprietors, partnerships and LLC’s can deduct the premium of their long term care policies as a business expense limited to the years’ maximum deductible amount.
The yearly maximum deductible amount is based on your attained age at the close of the taxable year and these maximums are indexed and increase each year for inflation.
In addition to federal incentives, some states offer tax advantages for long term care policies as well. Pennsylvania, which is the state that our office is located in, participates in the Partnership Program. The Pennsylvania partnership program combines private long term care insurance with special access to Medicaid. The Long Term Care Insurance Partnership Program allows residents of participating states the ability to shield a portion of their assets and still be able to qualify for Medicaid if their long term care needs extend beyond what is payable by their private Long Term Care insurance policy.
To learn more about the tax advantages associated with long term care for your specific situation, consult with our professionals at Affordable Long Term Care today by following this link.