A:  Long-term care insurance premiums are considered a medical expense.  Consider these tax facts:

Tax Advantages

2010 Federal Tax Deductibility Limits
Long-term care insurance premiums are considered a medical expense. For individuals who itemize income tax deductions, medical expenses are deductible to the extent they exceed 7.5% of the adjusted gross income. The premium deduction is determined annually based on the individual’s age (see chart below). Benefits paid to an individual under a tax-qualified Long-Term Care Insurance plan may be excluded from taxable income.

Maximum Deduction for Qualified Long-Term Care Insurance Premiums Under Code 213(d)(10)
 

2008 State Tax Credit
In New York State, you may be eligible to receive a 20% tax credit on tax qualified Long-Term Care insurance premiums according to the State's tax guidelines.

Tax Advantages (Employer/Employee)

• C-Corporations can generally deduct, as a reasonable business expense, all qualified Long-Term Care Insurance premiums paid for employees, their spouses, dependents, and retirees and their spouses.
• In addition, an employer's contributions toward the cost of the premium are not included as income for the individual.
• There are no discrimination rules for employer to provided Long-Term Care Insurance coverage. C-Corporations can offer the plan to a select group of employees without jeopardizing the exclusion from income.