Can a business deduct long-term care insurance premiums?
Often yes, and generously. A C-corporation can typically deduct 100% of tax-qualified LTC premiums for owners and employees with no age cap. Self-employed people and other business owners can deduct up to the age-based limit "above the line," without the 7.5%-of-income threshold.
The business tax treatment of long-term care insurance is one of the most valuable — and least known — features of a tax-qualified policy.
- C-corporations can generally deduct the full premium as a business expense for owners and employees, with no age-based cap, and it is not taxable income to the covered person. This is the most favorable treatment available.
- Self-employed owners — sole proprietors, partners, more-than-2% S-corporation shareholders, and LLC members taxed as any of these — can take the self-employed health insurance deduction "above the line." It is limited to the age-based eligible premium, but it is not subject to the 7.5%-of-income floor that limits individual filers.
Because the rules turn on your exact business structure, this is a conversation to have with a CPA or tax advisor before you buy.
General information only. This is educational and not insurance, legal, tax, or financial advice. Rules and products vary and change — confirm the specifics with a licensed professional.
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