Maryland Bill Would Create Tax Credit for Long Term Care Insurance
A new bill proposed in Maryland would create a more extensive taxpayer credit for long term care insurance policyholders.
Long Term Care Insurance Tax Credit
Senator Katherine Klausmeier (D-Baltimore) introduced SB 478 in the legislature this week. The bill would half the value of the state’s current tax credit for the first year the policyholder pays premiums. Right now, taxpayers receive up to a $500 tax credit for their long term care insurance premiums, but it only applies for the first year of coverage.
Under SB 478, the tax credit would increase after the first year to $500 and apply every year the coverage is in effect. If an individual taxpayer paid long term care insurance premiums for more than one person, they could receive a tax credit for each person who is covered.
This is not the first bill regarding long term care insurance tax credits that Senator Klausmeier has sponsored. S.B. 703, introduced in February 2011; S.B. 35, introduced in January 2012; and S.B. 23, introduced in November 2012 all proposed similar policies, but all the bills died in committee without a vote.
Creating a tax credit for long term care insurance is just one of the innovative ways to help encourage consumers to begin planning for the risk of long term care. At this point, many Americans are still unaware of the risk that long term care poses and therefore, have not yet even begun thinking about how they will cover the costs down the road.
Encourage Personal Responsibility
Most states across the country have long term care insurance partnership programs that encourage people to buy a policy by providing a Medicaid spend down waiver. The waivers provide assurance that should the policyholder exhaust their benefits and still need care, the state’s Medicaid program will not require them to spend down all of their assets to apply for Medicaid, which is usually the case. These programs, much like the proposed tax credit, help encourage personal responsibility in the area of long term care and reduce the financial burden placed on the state.
Read the full Senate bill here or find out more about the importance of planning for long term care. If you are interested in learning more about long term care insurance and how much it would cost you, fill out this form and we will be in touch with you shortly to provide a no-cost comparison of the top rated policies personalized for you.