What is the Long-Term Care Policy Premiums Deduction?

You may take a deduction for the amount of premiums paid for Indiana partnership long-term care insurance.

Important: The Indiana partnership policy will have the following box of information on the outline of coverage, the application, or the front page of the policy:

This policy qualifies under the Indiana Long-Term Care program for Medicaid Asset Protection. This policy may provide benefits in excess of the asset protection provided in the Indiana Long-Term Care program.

If the information shown in the box above is not located in a box on your policy, you do not have a qualifying policy, and are not eligible to take this deduction.

The deduction is the amount of premiums paid during the year on the policy for the taxpayer and/or spouse.

No double benefit is allowed. Certain self-employed individuals will claim these premiums as a deduction on the front page of federal Form 1040. The Indiana deduction will be the actual amount of these premiums paid, minus any amount of these already reported on federal Form 1040.

Example: Sam paid $4,500 in Indiana Partnership long-term care premiums. He deducted $1,360 of that amount as an expense on his federal Schedule C. He is eligible to deduct the $3,140 difference ($4,500 - $1,360) on Indiana Schedule 2 under line 11.

Important: Keep a copy of the premium statements as the Department can require you to provide this information.

More information about this program is available at Indiana's Department of Revenue website.

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