Long-Term Care Insurance Tax Deductions for Corporations

Tax Deductions for Sole Proprietors, Owners of Partnerships, Subchapter S Corporations, and LLCs

Partners of a Partnership, members of an LLC, or shareholders of greater than 2% of a Subchapter S Corporation are taxed as self-employed individuals.  The entity pays the long-term care insurance premium.  The partner, member, and shareholder include the premium in its AGI.  The partner, member, or shareholder may deduct the age-based eligible amount on its tax return.  It’s not necessary to meet the 10 % AGI threshold.

The employer may even discriminate and be selective about the class of employees it wishes to elect to cover with long-term care insurance benefits.

Tax Deductions for Owners of C Corporations

When a C Corporation purchases long-term care insurance on behalf of any of its employees, spouses, or dependents, the corporation is eligible to take a 100% tax deduction as a business expense on the total of the premiums paid. 

The long-term care insurance premium tax deduction is not subject to the age-based limitations in the table above.

The employer may even discriminate and be selective about the class of employees it wishes to elect to cover with long-term care insurance benefits.

When a C Corporation purchases long-term care insurance on behalf of any of its employees, spouses, or dependents, the corporation is eligible to take a 100% tax deduction as a business expense on the total of the premiums paid. 

*Please check with your CPA on ERISA guidelines.