What is a qualifying long-term care insurance policy?

A qualifying long-term care insurance policy is one that
  • is approved by the New York State Superintendent of Insurance under Insurance Law section 1117 (g); and
  • is a qualified long-term care insurance contract under Internal Revenue Code (IRC) section 7702B. (Note that section 7702B relates to policies for which a federal itemized deduction is allowed.)
OR

  • is a group contract delivered or issued for delivery outside New York State; and
  • the group contract is a qualified long-term care insurance contract under IRC section 7702B. The premiums paid for this insurance qualify for the credit even if the policy is not approved by the New York State Superintendent of Insurance.

A qualified long-term care insurance contract under IRC section 7702B is an insurance contract that provides only coverage of qualified long‑term care services. The contract must
  • be guaranteed renewable;
  • not provide for cash surrender value or other money that can be paid, assigned, pledged, or borrowed;
  • provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits; and
  • generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses.

The insurance company that issued your policy should be able to tell you if the policy qualifies under IRC section 7702B.

This credit is not refundable. If the amount of credit exceeds the taxpayer's tax for the year, the excess may be carried over to the following year or years.

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