Credit for Long-Term Care Insurance
You may be entitled to an income tax credit if you paid premiums
on a qualified long-term care insurance contract that provides insurance
coverage for yourself, your spouse or a dependent for whom you were
allowed to claim a personal exemption on your federal return. Qualified
long-term care insurance contracts are defined in Section 7702B
of the Internal Revenue Code. Medical insurance premiums that you
pay for general health care, hospitalization, or disability insurance
do not qualify as premiums paid for a long-term care insurance contract.
Federal law limits the deductible long-term care premiums based
on an individual's age. Those premiums that are not deductible on
your federal return because of the age limitations may be used in
calculating the credit.
The credit is equal to 15 percent of the premium costs but may
not exceed $350.00 for each contract for which a credit is claimed.
To determine your tax credit, you should complete the worksheet
on page 13 of the instructions and enter the calculated tax credit
on line 21 of the Form D-400TC. Be sure to not include any
premiums that were deducted from or not included in your federal
gross income. An example of payments that are not included in federal
gross income is premiums paid through an employer-sponsored plan
in which the payments are excluded from taxable wages (pre-taxed
dollars). If you claimed a deduction for medical expenses on Federal
Schedule A, Line 4, or if you claimed a deduction for self-employed
health insurance premiums on Federal Form 1040, Line 29, you are
not entitled to claim this credit. However, you may claim this credit
for any premiums paid for long-term care insurance that are not
deductible on your federal return because of the age limitations
contained in section 213(d)(10) of the Internal Revenue Code. The
credit may not exceed your tax for the year and any unused portion
of the credit may not be carried over to subsequent years.
If you are a nonresident or part-year resident, you must multiply
the credit by the decimal amount on line 12 of Form D-400. Under
certain circumstances, the decimal amount on line 12 can exceed
one hundred percent. In these cases, the credit is limited to the
amount on line 3 of the worksheet located on page 13 of the instructions.
Be sure to include the Form D-400TC (tax credit schedule) when filing
Last modified on:
10/31/07 03:53:15 PM.