What are the tax benefits for an employer offering long term care insurance?
The tax benefits are based on how the entity reports to I.R.S.
Tax Information for Self-Employed Individuals, Partnerships, LLC, S-Corporations
Self-employed individuals, including sole proprietors, partners and more than 2% shareholders of an S-Corporation, are permitted to deduct 100% of the eligible, age based premium under tax qualified LTC plans. Qualified LTC Premiums are treated as health insurance premiums and are permitted to be deducted for the taxpayer, his spouse, and dependents. (IRC Section 162 (1)).
The full amount of employer paid long-term care insurance qualifies as an accident and health plan within the meaning of IRC Sections 105(b) and 106. This means that the premium is fully deductible. An employer may select which employee's premiums the company will pay. Discrimination rules do not apply.
Some states also have tax deductibility or credits available. Contact Baygroup Insurance for details.