Tax Benefits of Offering Long-Term Care Insurance to Employees
Do you have any clients who own businesses? If so, they can take advantage of an excellent opportunity to maximize tax advantages by purchasing long-term care coverage for themselves as well as offering coverage to employees. Offering long-term care insurance is a unique way for business owners to recruit, reward, and retain employees as well as ensure additional tax deductions for their business.
Read More: Is Long-Term Care Insurance a Viable Asset Protection Tool?
Business Owners Stand Out with Long-Term Care Insurance
In order to hire and retain their staff, many business owners are constantly seeking new ways to stand out from their competition. They’d rather preserve the time, effort, and expense spent recruiting and training new employees and focus it elsewhere. As a result, many employers have begun offering more innovative benefits to their employees.
For example, offering long-term care insurance (LTCI) as an employer-paid or voluntary benefit can help increase employee loyalty and attract new hires. By offering an LTCI benefit to their employees, a business owner can offer a practical solution to their long-term care dilemma. Additionally, LTCI premiums paid through the employer can be tax deductible.
Tax-Deductible Benefit for Employees
In addition to offering an extra benefit, employers who pay some or all of a non-owner employee’s LTCI premium may deduct the expense on their taxes. This deduction also applies to premiums paid for the employee’s spouse or other tax dependent. There is no limit to the amount of premium an employer can pay and deduct, and premiums paid by an employer are excluded from the employee’s gross income. This applies to ANY business entity as long as the employer is paying for a non-owner employee.
Read More: The Impact of Inflation on Long-Term Care Costs and Estate Planning
Whether or not your client owns a business, it’s important they have a plan for long-term care. If your client has assets to protect, they should certainly consider long-term care coverage as part of their estate plan. When discussing your client’s plan for long-term care, make sure you ask if they are a business owner and ensure they understand the tax advantages available to them.
As Senior Content Specialist, Katie drafts and edits content across multiple platforms, including blogs, guides, emails, white papers, videos, brochures, website pages, and more. She conducts research and gathers up-to-date information to keep our clients well-informed.
