Long Term Care Tax Information
Bedrosian & Associates recommends purchasing individual long term care on an after-tax basis so the long term care benefit is tax-free. The tax deduction on your tax return for a qualified long-term care insurance policy’s premium is limited, especially for those with a high income level.
Can I deduct long term care costs on my tax return?
You can deduct on your tax return the costs of long term care for yourself, your spouse, or your dependent if the services are required because of a chronic illness. Generally, unreimbursed expenses that exceed 7½% of Adjusted Gross Income are tax deductible on your tax return. Your total long term care costs for the tax year that you deduct on your tax return must be reduced by any reimbursement. The chronically ill person must have been certified within the last 12 months by a licensed health care practitioner that they are unable to perform, for a period of at least 90 days, two or more of the following activities without substantial assistance:
- continence or
Services provided by a relative are only tax deductible on your tax return if that relative is a licensed professional. To the extent that the insurance company reimburses long term care expenses, benefits paid by an indemnity type contract are tax free. In addition long term care insurance premiums and long term care services may be paid on a tax-deductible basis through a Health Savings Account (HSA). Current law limits the annual amount of LTC premiums that can be deducted, based upon the age of the insured. The annual limitation amounts are adjusted for inflation each year.
- 40 or less
- 41 to 50
- 51 to 60
- 61 to 70
- over 70
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- Blue Shield and Sutter Health sign 3 year contract January 5, 2017
- Eliminating Dependent Coverage? COBRA Rules, and the Employer Shared Responsibility Provision October 26, 2016
- Wrap SPD Requirements – Are you ERISA Compliant? October 14, 2016
- California Choice HSA Options – Q4 2016 October 5, 2016
Bedrosian & Associates
Address: 525 Veterans Blvd., Suite 102 Redwood City, CA 94063
Phone: (650) 367-0259 Fax: (650) 367-0599
Ron Bedrosian License #0478051
Arman Vahdatinia License #0I88850
Ryan Bedrosian License #0F00667
Ryan McKenzie License #0G66077
Alex Bedrosian License #0G33562