The Todd Benefits Group, Inc.

State Tax Savings

If your state offers a full, 100% deduction for long-term care insurance premiums, and your state income tax rate is, for example, 7% then your taxes would be reduced by $70 if you paid long-term care insurance premiums of $1,000. If your state offers a tax credit of $100 then the state will "pay" the first $100 of your premium.

StateTax incentiveDescription
AlabamaDeductionA deduction is allowed for the amount of premiums paid pursuant to a qualifying insurance contract for qualified LTCI coverage.
ArkansasDeductionPremiums for a qualified insurance policy may be deductible as medical expense, if unreimbursed medical expenses exceed 10% of the taxpayer's Adjusted Gross income.
CaliforniaDeductionPermits the same tax deduction as is allowed for federal income tax purposes for premiums paid for the purchase of qualified LTCI.
ColoradoCreditState income tax credit equal to the lesser of 25% of premiums paid for an LTCI policy or $150.00 per policy. Individuals who qualify for the credit are those with federal taxable income less than $50,000 ($100,000 for joint filers claiming a credit for 2 policies). An LTCI policy must meet Colorado’s definition of long-term care.
District of ColumbiaDeductionA deduction in the amount an individual pays annually in premiums paid for LTCI is permitted from gross income, provided that the deduction not exceed $500.00 per year, per individual, whether the individual files individually or jointly. An LTCI policy must meet the District of Columbia’s definition of long-term care.
HawaiiDeductionAn individual state tax deduction is allowed for LTCI premiums. This deduction is limited in the same manner as the deduction on the federal level, and is also only available to the extent that all medical expenses, including long-term care, exceed 10% of Hawaii Adjusted Gross Income instead of the Federal Adjusted Gross Income.
IdahoDeductionPremiums paid during the taxable year, by taxpayer for LTCI, which LTCI is to be for the benefit of the taxpayer, a dependent of the taxpayer or an employee of the taxpayer, may be deducted from taxable income to the extent that the premium is not otherwise deducted or accounted for by the taxpayer for Idaho income tax purposes. The deduction may be taken for a federally tax-qualified LTCI policy meeting Idaho’s definition of LTCI.

This deduction
applies only to IN
Partnership Policies.
An individual taxpayer is permitted to deduct an amount equal to the eligible portion of premiums paid during the taxable year by the taxpayer for a qualified LTCI policy (as defined in the Indiana Code) for the taxpayer, the taxpayer’s spouse, or both. Deduction only applies to the Partnership program. Ind. Code § 6-3-1-3.5 and § 12-15-39.6.5 (Qualified Long-Term Care Policy).
IowaDeductionPermits tax deduction from net income for premiums paid for LTCI coverage for nursing home coverage to the same extent allowable under federal law and to the extent not otherwise deducted in computing Adjusted Gross Income.
KentuckyExclusionA taxpayer may exclude from Kentucky Adjusted Gross Income any amounts paid for LTCI as defined in the Kentucky Code.
LouisianaCreditA credit against the individual income tax for amounts paid as premiums for eligible LTCI. The amount of the credit shall be equal to 10% of the total amount of premiums paid annually by each individual claiming the credit and must meet the specified qualification requirements.
MaineDeductionDeduction of full premium less any amount deducted for federal income tax purposes and by an LTCI premiums claimed as itemized deduction pursuant to Maine Rev. Stat. tit. 36 section 5125.
MarylandCreditA credit is allowed against the state income tax for employers providing long-term care insurance up to an amount equal to 5% of the costs incurred by the employer during the taxable year for providing long-term care insurance as a part of an employee benefit package. The credit may not exceed $5,000 or $100 for each employee covered.

A one-time credit is allowed an individual against the state income tax in an amount equal to 100% of the eligible federally qualified long-term care insurance premiums covering the individual, spouse, parent, step-parent, child, or step-child, not to exceed $500.
MinnesotaCreditA taxpayer is allowed a tax credit for premiums paid during the tax year for LTCI (as defined under Minnesota law). The Credit for each policy is equal to the lesser of 25% of premiums paid to the extent not deducted in determining federal taxable income OR $100. Maximum allowable credit per year is $200 for couples filing jointly and $100 for all other filers. Any unused tax credit may not be carried forward to future tax years. No credit is allowed if the taxpayer deducted the premium amounts when net taxable income was calculated or the premiums were excluded from net taxable income.
MississippiCreditIndividual tax credit equal to 25% of the premium for a qualified LTCI policy, with a maximum credit of $500. A credit is not permitted to any premiums that were deducted in arriving at taxable income. Unused tax credit may not be carried forward.
MissouriDeductionIndividual tax deduction for premiums paid for an LTCI policy that are non-reimbursed and not included in itemized deductions. Policy does NOT have to be tax qualified.
MontanaCredit/DeductionCREDIT: A limited credit is available for expense of caring for certain elderly family members (which includes premiums paid for LTCI coverage). The amount of credit is determined based on the taxpayer’s adjusted gross income and cannot exceed $5,000 per qualifying family member in a taxable year ($10,000 for two or more family members).

DEDUCTION A deduction is allowed for all premium payments made directly by the taxpayer for long-term care insurance policies or certificates that provide coverage primarily for any qualified long-term care services for the taxpayer, the taxpayer's parents, or the taxpayer's grandparents. In order to take this deduction, the premiums must not have been deducted elsewhere on your tax return when you determine your Montana adjusted gross income.
NebraskaDeductionAllows a state income tax deduction for The Nebraska Long-Term Care Savings Plan contributions of up to $2,000 per married filing jointly return or $1,000 for any other return, to the extent not deducted for federal income tax purposes.
New HampshireNoneNone
New JerseyDeductionAllows a deduction for medical expenses (including LTCI premiums for taxpayers, their spouses or dependents) to the extent such expenses exceed 2% of taxpayer’s gross income.
New MexicoCredit/ExemptionCREDIT: Allows taxpayers 65 and older and not a dependent of another taxpayer to claim a credit of $2,800 for medical care expenses, which includes LTCI premiums, paid for the taxpayer, spouse or dependents if expenses equal $28,000 or more within a taxable year and if expenses are not reimbursed or compensated.

EXEMPTION: Allows taxpayers 65 and older an exemption of $3,000.00 for medical care expenses, which include long-term care insurance premiums, if such expenses equal $28,000.00 or more within a taxable year and are unreimbursed or uncompensated.
New YorkCreditA credit for personal income tax is allowed equal to 20% of the premium paid during the taxable year for qualified long-term care insurance.

A credit is allowed against the corporation tax equal to 20% of the premiums paid during the taxable year for qualified long-term care insurance. The credit may not reduce the tax payable to less than the state minimum tax, but any excess credit may be carried forward.

An S corporation is allowed a credit against the personal income tax equal to 20% of the premium paid during the taxable year for qualified long-term care insurance.
North CarolinaCreditNone.
North DakotaCreditAllows for a tax credit equal to premiums paid but not to exceed $250.00 in each taxable year for state residents who paid premiums on a North Dakota LTC Partnership qualified plan covering the taxpayer or his/her spouse. The credit is effective for tax years beginning in 2009.
OhioDeductionAllows a deduction for the amount paid for qualified LTCI for the taxpayer, his/her spouse, and dependents (but only to the extent not otherwise allowable as a deduction or exclusion in computing federal or Ohio adjusted gross income).
OklahomaDeductionPermits the same tax deduction as is allowed for federal income tax purposes.
Rhode IslandNoneNone
South CarolinaNoneNone
South DakotaNoneNone
VirginiaDeductionDEDUCTION: Taxpayers can take a deduction for LTCI premiums from federal Adjusted Gross Income to compute VA taxable income, but only if the taxpayer didn't deduct LTCI premiums for federal income tax purposes.
West VirginiaDeductionA deduction is allowed for resident taxpayers for amounts paid during the taxable year for premiums for LTCI as defined in the West Virginia Code, for taxpayer, his/her spouse, parent or other dependent, from the federal adjusted gross income reported on the West Virginia state tax return. A deduction is allowed on the state level only to the extent the amount is not allowable as a deduction for purposes of determining the taxpayer’s federal adjusted gross income for the year of payment.
WisconsinDeductionAllows a person to subtract from federal adjusted gross income a portion (generally 100% of the amount paid for the policy minus the amounts deducted from gross income for a LTCI policy in the calculation of federal adjusted gross income) of the amount paid for a LTCI policy for taxpayer and his spouse when computing Wisconsin taxable income. The deduction is not available on the state level to the extent a deduction was taken for these premiums on the federal return. In addition, the amount claimed as a deduction from LTCI in calculation of federal taxable income is excluded from the Wisconsin itemized deductions credit.

This information is not a substitute for expert tax advice. Please contact a tax professional for complete details.