IRS Announces Increased 2013 Deductibility Limits For Long-Term Care Insurance
October 18, 2012. The Internal Revenue Service (IRS) announced increased deductibility levels for long-term care insurance policies purchased in 2013.
"For taxable years beginning in 2013, 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 2013 Deductible Limits 2012 Deductible Limits
40 or less $ 360 $ 350
More than 40 but not more than 50 $ 680 $ 660
More than 50 but not more than 60 $1,360 $1,310
More than 60 but not more than 70 $3,640 $3,500
More than 70 $4,550 $4,370
Source: IRS Revenue Procedure 2012-41 (2013 limits) and 2011-52 (2012 limits)
For caledar year 2013, the per-diem limitation under Section 7702B(d)(4) for periodic payments received under a qualified long-term care insurance contract is $320 (the 2012 limit was $310).
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
See www.insurance-plus.com for information.