Maximizing Tax Deductions For Long-Term Care (LTC) Insurance

July 17, 2017

By: Michael Kitces

Under IRC Section 213(d)(1)(D), premiums for long-term care insurance are deductible along with other individual medical expenses.

Notably, to be eligible for deductibility, the long-term care insurance must be (tax-)“qualified” coverage (as defined under IRC Section 7702B(b)), though in practice virtually all long-term care insurance issued today (and in the past 20 years) is tax-qualified. (Non-Tax-Qualified, or NTQ long-term care insurance, is primarily characterized by either not requiring a minimum Activities of Daily Living restriction, or being more lax in the certification requirements to be eligible for claims.)

Premiums paid for tax-qualified LTC insurance are deductible if paid for the individual taxpayer themselves, his/her spouse, or any dependent as defined under IRC Section 152, which can include both dependent children and even dependent parents, if they otherwise qualify as dependents for tax purposes, and without regard to the must-be-unmarried or income tests that otherwise apply to a “qualifying relative” dependent.

While premiums are deductible, though, the amount of the deduction is limited.

Full Article

Clarifying the Options for Long-Term Care

July 12, 2017

By David LaMartina

What clients need to know about in-home, residential and continuing care

Given the growing need for long-term care, more advisors are talking to clients about LTC insurance, hybrid life, and other funding options. Fewer advisors, however, are discussing the specific options for care. To many clients – particularly those who’ve never dealt with an aging parent’s LTC – the whole thing seems hazy and unpredictable.

Full Article

Views How to protect workers’ retirement with LTC benefits

July 7, 2017

Long-term care insurance is a blind spot for most consultants, but neglecting it leaves employees open to huge financial risk, says adviser William Upson.

Long-term care insurance is the most effective solution to fill the gaps in most retirement plans, as well as protect young Americans’ future lifestyles against financial strain. It’s also an accessible option, as smart employers can offer it at no cost as a benefit to their employees and healthy individuals can qualify independently at a low cost.

Full Article