Alert
Close

Think you know AARP? What you don't know about us may surprise you. Discover all the 'Real Possibilities'

Most
Popular

Viewed

Commented

Research Report

Federal and State Income Tax Incentives for Private Long-Term Care Insurance

This and Related Reports

To help make long-term care insurance more affordable, both federal and state governments provide tax subsidies for private long-term care insurance.  This PPI research report describes federal and state tax subsidies for long-term care insurance, their value to taxpayers (by age and income), and where possible, their cost to federal and state governments.  

The report finds that most policyholders of long-term care insurance did not receive tax subsidies from the federal itemized medical deduction.  Policyholders who did benefit tend to be older and affluent.  Moreover, the deduction favors higher-income policyholders because of higher tax rates and older policyholders because of deduction limits that vary by age.

Conversely, many policyholders qualify for state tax incentives for long-term care insurance, but these incentives are usually too small because of low tax rates.  A handful of states offer nonrefundable tax credits that could reduce long-term insurance costs by as much as 25 percent.  However, the value of these credits is generally limited by dollar caps, and insufficient taxpayer liability may prevent policyholders from receiving the maximum possible credit.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Caregiving
Resource Center

Find tools, work sheets and tips on how to plan, prepare and succeed as a caregiver. Select a Caregiving Resource Center topic from the drop-down menu below.

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Grandson (8-9) whispering to grandfather, close-up

Members save on hearing care with the AARP® Hearing Care Program provided by HearUSA.

AARP Discounts on ADT Companion Services

Members save 20% off installation of any NEW ADT Personal Emergency Response System.

Movies Unlimited

Members save 10% on purchases of DVDs & Blu-ray discs with Movies Unlimited.

Caregiving walking

Caregiving can be a lonely journey, but AARP offers resources that can help.

Featured
Groups

Caregiving

What do you wish you knew when you first started caring for a loved one? Discuss

Tactics for Aging In Place

Home is where the Heart is. Share with us your stories, strategies and caregiving tips for aging at home. Discuss