Tax Treatment of Benefits

For Tax-Qualified Long-Term Care Insurance policies that pay benefits under an Indemnity Model, benefit payments are subject to a daily dollar cap.

2014 Daily Indemnity
(Per Diem) Limit
2013 Daily Indemnity
(Per Diem) Limit
2012 Daily Indemnity
(Per Diem) Limit
$330
$320
$310

If the individual taxpayer receives Tax-Qualified Long-Term Care Insurance benefits in excess of this annual daily limit, those "excess benefits" will be considered income for tax purposes. However, the taxpayer may exclude from income the "excess benefits" to the extent of the individual's actual unreimbursed Tax-Qualified Long-Term Care expenses.

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Tax Info