Friday, November 1, 2013

November 1, 2013. The American Association for Long Term Care Insurance announced today release of increased deductibility levels for long-term care insurance policies purchased in 2014.

"For taxable years beginning in 2014, the limitations have been increased again," explains Jesse Slome, executive director of the American Association for Long Term Care Insurance (AALTCI), the industry's trade association. "Tax advantaged long-term care insurance remains one of the few remaining significant tax-savings benefits especially meaningful for small business owners."

The deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term 'medical care' are as follows:

Attained Age Before Close of Taxable Year

2014 Deductible Limits

Age 40 or less   $ 370

More than 40 but not more than 50   $ 700

More than 50 but not more than 60   $1,400

More than 60 but not more than 70   $3,720

More than 70   $4,660

Source: IRS Revenue Procedure 2013-35 (2014 limits)

For calendar year 2014, the per-diem limitation under Section 7702B(d)(4) for periodic payments received under a qualified long-term care insurance contract is $330 (the 2013 limit was $320).

The American Association for Long-Term Care Insurance is the national association serving insurance and financial professionals who provide long-term care financing solutions. A complete explanation of long term care insurance tax deduction rules for individuals and business owners can be found on the Association's website: http://www.aaltci.org/tax .