Qualified Long-Term Care

Qualified Long-Term Care

Non-taxable benefits one receives from a long-term care insurance policy covering a long-term, non-life-threatening condition. In order for the benefits to be non-taxable, one must require care for at least 90 days and must be unable to perform at least two of the activities of daily living. Qualified long-term care was instituted in the United States in 1997.
References in periodicals archive ?
Further, while health insurance premiums are not treated as qualified medical expenses according to IRS rules, premiums for Medicare Parts A and B, as well as qualified long-term care insurance premiums, are expenses that can be withdrawn tax-free.
Even though long-term care is not medical treatment, the costs for qualified long-term care services of a chronically ill individual that are not covered by insurance, government benefits, or other sources can be treated as a deductible medical expense (IRS Publication 502).
Beginning in 2010, tax-free distribution status was given to both annuity assets and long-term care rider benefits used for a qualified long-term care purpose.
Costs of qualified long-term care services and, to a limited amount, premiums paid for qualified long-term care insurance contracts
Lincoln MoneyGuardA II provides income-tax-free reimbursements for qualified long-term care expenses, an income-tax-free death benefit if care is not needed, or return of premium (ROP) options, which have expanded with MoneyGuardA II.
During "Phase I," the qualified long-term care expenses of a chronically ill covered person were paid up to a certain monthly cap until the value of the contract was reduced to zero.
Seeking independent advice from a qualified long-term care specialist is a good place to start.
Amounts paid for qualified long-term care services are deductible as medical expenses under Sec.
Internal charges to pay the qualified long-term care insurance rider in a life insurance policy or annuity are no longer treated as taxable distributions.
However, a notable exception allows reimbursement for premiums paid for a qualified long-term care insurance contract.
The only insurance protection provided under the contract is coverage of qualified long-term care services (see Q 341).
Now the Pension Protection Act of 2006 allows for tax-free withdrawals from annuities with qualified long-term care benefits.
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