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Article: Long-term care insurance gets health insurance tax treatment.
- Article from:
- The Tax Adviser
- Article date:
- December 1, 1996
- Author:
CopyrightCOPYRIGHT 1996 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Until the recent passage of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), there were no specific provisions dealing with the treatment of the cost of long-term care and long-term care insurance premiums. This new legislation gives qualifying long-term care insurance the same tax treatment as health insurance.
In general, for tax years after 1996, premiums paid for qualified long-term care insurance will be deductible as a medical expense (subject to the 7.5% floor), and benefits received from the same plans will be excludible from income. Both the deduction and exclusion are subject to special limitations. The provision is generally ...