November 2, 2010. The Internal Revenue Service (IRS) announced increased deductibility levels for long-term care insurance policies purchased in 2011.
"For taxable years beginning in 2011, the limitations have been increased," 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
2011 Deductible Limits
40 or less $ 340
More than 40 but not more than 50 $ 640
More than 50 but not more than 60 $1,270
More than 60 but not more than 70 $3,390
Source: IRS Revenue Procedure 2010-40
The American Association for Long-Term Care Insurance (http://www.aaltci.org/) is the national association serving insurance and financial professionals who provide long-term care financing solutions. A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: http://www.aaltci.org/tax .