20. Can I
deduct long term care expenses from my income tax?
YES! - If you purchase a Tax Qualified Plan.
President Clinton signed into law a favorable tax
treatment for long term care in August 1996. The parameters are as follows:
-
The insurance plan was issued before 1/1/97 and met state standards at the time of
issue.
-
A plan purchased after 1/1/97 is allowed by the federal government to be exchanged for
new, qualified LTC contracts up to 1/1/98.
-
If you purchased a 1997 Tax Qualified LTC Plan.
Within certain limitations applying to per diem policies, LTC benefits
paid by a qualified plan will not be taxable as income.
Similar to other types of health insurance, employer contributions are deductible as
business expenses.
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