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Maine.gov > PFR Home > Insurance Regulation > FAQ > Long Term Care

Frequently Asked Questions - Long Term Care

I understand that for some long term care policies the insured person may deduct premiums on the Maine income tax return. For what policies is this deduction available?

This is a somewhat complicated answer, and you should consult with a tax or financial advisor. There are three kinds of long term care policies for which the deduction is allowed. First, any policy stating it is intended as "qualified" under the Internal Revenue Code for a deduction on the insured's federal income tax return automatically permits the insured to claim a deduction as well on their Maine return. This automatic qualification occurs irrespective of the date when the federally qualified policy was first issued. The result is that a policy qualified for federal income tax purposes is qualified for a Maine income tax deduction.

Second, any policy issued in Maine during 1991 through 1999 that has been "certified" in writing by the Maine Superintendent of Insurance as eligible for state income tax incentives allows a premium deduction on the state return. Maine Revenue Services maintains a list of these certified policies certified. The list can be found on and reproduced from the Bureau's website.

Third, any policy delivered in Maine beginning in 2000 that is not federally tax qualified (i.e., premiums cannot be deducted on the federal tax return) nonetheless may be entitled to a deduction on the Maine tax return when two conditions have been met. The policy form has to be approved by the Bureau for marketing in Maine and the insurer has to request from the Superintendent a letter certifying the policy as entitled to state income tax incentives. For more information on this procedure, see 24-A MRSA S5075-A.

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If you have any suggestions for things to be included here, please send them to Thomas.R.Michaud@maine.gov. Thank you for your suggestions and thank you for your patience.

 

Last Updated: October 28, 2008