Long-Term care Insurance Tax Deductible Limits Raised
"One of the little-known benefits for certain long-term care insurance is the ability to deduct some or all of the cost during retirement years," states Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). "For a couple older than age 70, the new IRS levels may enable them to deduct almost $12,000."
Tax deductible limits for 2023 will increase between 6 and 7 percent Slome notes. "Only long-term care policies that meet the federal government's tax-qualified requirements qualify for a potential tax deduction," Slome explains. "Most of the linked benefit or hybrid life insurance policies do not qualify for a possible tax benefit."
The tax deductibility benefit rarely is a benefit when an individual or couple first purchase insurance protection. "Only after retirement from employment are people more likely to reach the health expense threshold," Slome acknowledges. "That potential tax deduction can be a huge benefit after retirement and something seniors should take into consideration when looking into their long-term care protection options."
2023 Tax Deductibility
The following are the new 2023 deductible limits per-individual (2022 in brackets):
Attained Age Before Close of Taxable Year 2023 Limit (2022)
40 or less $480 ($450)
More than 40 but not more than 50 $890 ($850)
More than 50 but not more than 60 $1,790 ($1,6,90)
More than 60 but not more than 70 $4,770 ($4,510)
More than 70 $5,960 ($5,640)
Access tax deductible limits for long-term care insurance going back to 2012 at https://www.aaltci.org/
The American Association for Long-Term Care Insurance advocates for the importance of planning and supports insurance and financial professionals who provide long-term care financing solutions. To see prior year's long-term care insurance tax deductible limits, visit the organization's website https://www.aaltci.org/