IRS increases tax deductions for LTC insurance

The Internal Revenue Service (IRS) has increased the tax deductions allowed for the purchase of long-term care insurance policies in 2014.

The new limits under Section 213(d)(10) for eligible long-term care premiums includable in the term “medical care,” according to the American Association for Long Term Care Insurance (AALTI), are $3,720 for those aged more than 60 years but not more than 70 and $4,660 for those aged more than 70 years. Deductible amounts for those age groups in 2013 were $3,640 and $4,550, respectively.

For more information about allowable deductions for other age groups in 2014, see the IRS website.

Also, according to the AALTI, the IRS has increased the per-diem limitation under Section 7702B(d)(4)for periodic payments received under a qualified long-term care insurance contract to $330 in 2014. The 2013 limit was $320.

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