Wednesday, June 30, 2010

Long Term Care Insurance: Tax Advantages

FEDERAL TAX DEDUCTIONS:

For Individuals...

~ Qualified LTC insurance premiums can be treated and itemized as medical deductions provided they exceed 7.5% of adjusted gross income.

~ Qualified LTC plan benefits received are not taxable income.

For Employers...
~ Employer - paid LTC premiums are treated like regular health insurance and are tax deductible for S- and C-Corporations.

~ Employers receive a tax deduction for any portion of LTC premiums paid for employees.

~ Employer contributions and paid benefits are excluded from employees’ income.

~ There are group rates available; medical requirements may be waived for employee-group plans.



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