Tax Deductions for Long-Term Care Insurance are Increased
By Robert Scalise, Jr. | Attorney at Law at July 20, 2024 | 8:00 am | Print
Many of our clients are concerned about the cost of long term care. With the average cost of a convalescent home being $11,000 a month in Connecticut, this expenses can be devastating to any family. However, for those who have long term care insurance, or are thinking of purchasing it, there is good news.
The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2012.
If you itemize your deductions, you can generally deduct part of your premiums if the premiums, together with your other unreimbursed medical expenses, amount to more than 7.5 percent of your adjusted gross income.
The maximum amount of premiums you can deduct each year depends on your age at the end of the year. For 2012, the maximums are:
Age Max. Deduction
40 or less $350
41-50 $660
51-60 $1,310
61-70 $3,500
Over 70 $4,370
For policies issued in 1997 or later, the premiums are deductible so long as the policies meet certain requirements. For instance, they must give you the option of “inflation protection” and “non-forfeiture protection.” (You don’t have to choose these options, but the policy has to offer them.)
For policies issued before 1997, the premiums are deductible if the policies were approved by the state insurance commissioner.
The rules for deductibility are different if you’re self-employed. In that case, you can generally take the deduction as long as you made a net profit, even if your medical expenses don’t exceed 7.5 percent of your income.
If you are considering purchasing long term care insurance, consider a plan that is part of Connecticut Partnership for Long Term Care. This plan offers Medicaid Asset Protection in addition to covering nursing home and in home care. Please feel free contact us for more information.
Attorney Robert A. Scalise, Jr. is a Partner of the law firm Ericson, Scalise & Mangan, PC located at 35 Pearl St., New Britain, CT. www.esmlaw.com. His practice concentrates on Elder Law, Estate Planning, Probate, Estate Administration, Title 19 Asset Preservation and Real Estate. A column from this office will appear in the New Britain City Journal every three weeks.
