2011 Long Term care Insurance Tax Deduction Limits Announced

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 .

Increased Tax Deduction Limits For Long-Term Care Insurance

The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2010. "For the first time, the maximum deductible limit for an individual exceeds $4,000," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance , the national trade organization.

"The federal government and an increasing number of states are sending a clear signal that individuals need to plan for long-term care and tax deductibility and tax credits certainly make long-term care insurance more attractive to millions," Slome adds. "It is a positive sign to see limits for long-term care insurance deductibility increase especially when pension contribution limits for 2010 were not increased."

The end of the year provides a double tax-saving incentive for consumers. There is still time to take advantage of tax deductions in 2009 and also benefit from the increased deductible limits next year.

The 2010 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110

A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: Click here for 2010 tax deductible limits.