A4944: Increase Long-Term Care Tax Credit (NY Assembly, 2017-18)

What's happening

This bill increases the tax credit for long-term care insurance premiums in certain cases and requires insurers to provide annual premium statements to policyholders.

Why it matters

Creates larger tax credits for those whose long-term care insurance premiums increase due to state-approved rate hikes, raising the credit from 20% to 25% of the premium paid in such cases. This helps offset rising costs for policyholders when insurers raise rates with regulatory approval, making long-term care insurance more affordable during premium spikes.
Significantly increases the tax credit for people who buy long-term care insurance at younger ages, with credits ranging from 50% of premiums for those buying before age 30, down to 20% for those buying after age 55. This incentivizes early purchase, potentially lowering long-term insurance costs for participants and encouraging broader, earlier coverage.
Mandates that insurers provide annual premium statements to policyholders detailing key facts such as policy start date, age at purchase, original premium, all premium increases, total paid in the prior year, and cumulative premiums paid since inception. This improves transparency, helps consumers track their long-term insurance costs, and could simplify tax credit claims and financial planning.
Requires that the annual premium statements be sent out by January 31 each year and allows them to be combined with other required statements. This ensures timely and organized delivery of crucial policy information, potentially aiding in tax preparation and policy review.

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Increase Long-Term Care Tax Credit

Plain English, a few words. Used as the page title.

History

Jan 29, 2018 · AssemblyPrint number 4944a
Jan 29, 2018 · AssemblyAmend and recommit to ways and means
Jan 3, 2018 · AssemblyReferred to ways and means
Feb 6, 2017 · AssemblyReferred to ways and means

Companion bill

The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.

S2559Senate

Expand Long-Term Care Tax Credit

In Senate Committee · Finance · Sponsor Martin J. Golden

Impact 6 · Moderate0% to pass

Full text

3 pagesUnderlined is new~~[Struck]~~ is removedOfficial text on nysenate.gov ↗

STATE OF NEW YORK

4944--A

2017-2018 Regular Sessions

IN ASSEMBLY

February 6, 2017

Introduced by M. of A. SCHIMMINGER -- read once and referred to the Committee on Ways and Means -- recommitted to the Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee

AN ACT to amend the tax law and the insurance law, in relation to the tax credit for the purchase of long-term care insurance

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

Section 1. Subdivision 1 of section 190 of the tax law, as amended by section 102 of part A of chapter 59 of the laws of 2014, is amended to read as follows:

1. General. [A] For taxable years beginning before January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance, and for taxable years beginning on and after January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance unless the premium for such insurance increased during the taxable year and such increase was approved after application to and by the department of financial services, then the amount of credit allowed for such insurance shall be twenty-five percent of the premium paid during the taxable year for such insurance. In order to qualify for such credit, the taxpayer's premium payment must be for the purchase of or for continuing coverage under a long-term care insurance policy that qualifies for such credit pursuant to section one thousand one hundred seventeen of the insurance law.

§ 2. Paragraph (a) of subdivision 14 of section 210-B of the tax law, as added by section 17 of part A of chapter 59 of the laws of 2014, is amended to read as follows:

(a) General. [A] For taxable years beginning before January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD06027-03-8

A. 4944--A 2

during the taxable year for long-term care insurance, and for taxable years beginning on and after January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance unless the premium for such insurance increased during the taxable year and such increase was approved after application to and by the department of financial services, then the amount of credit allowed for such insurance shall be twenty-five percent of the premium paid during the taxable year for such insurance. In order to qualify for such credit, the taxpayer's premium payment must be for the purchase of or for continuing coverage under a long-term care insurance policy that qualifies for such credit pursuant to section one thousand one hundred seventeen of the insurance law.

§ 3. Paragraph 1 of subsection (aa) of section 606 of the tax law, as amended by section 1 of part P of chapter 61 of the laws of 2005, is amended to read as follows:

(1) Residents. [A] For taxable years beginning before January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance, and for taxable years beginning on and after January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article in an amount equal to the applicable percentage of the premium paid for such long-term care insurance. The applicable percentage shall be based upon the taxpayer's age when he or she purchased the long-term care insurance policy for which credit is claimed and shall be as follows: (a) for policies purchased prior to the age of thirty, fifty percent, (b) for policies purchased after the age of twenty-nine but prior to the age of thirty-five, forty-five percent, (c) for policies purchased after the age of thirty-four but prior to the age of forty, forty percent, (d) for policies purchased after the age of thirty-nine but prior to the age of forty-five, thirty-five percent, (e) for policies purchased after the age of forty-four but prior to the age of fifty, thirty percent, (f) for policies purchased after the age of forty-nine but prior to the age of fifty-five, twenty-five percent, and (g) for policies purchased after the age of fifty-five, twenty percent. In order to qualify for such credit, the taxpayer's premium payment must be for the purchase of or for continuing coverage under a long-term care insurance policy that qualifies for such credit pursuant to section one thousand one hundred seventeen of the insurance law. If the amount of the credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years.

§ 4. Paragraph 1 of subdivision (m) of section 1511 of the tax law, as amended by section 21 of part B of chapter 58 of the laws of 2004, is amended to read as follows:

(1) [A] For taxable years beginning before January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance, and for taxable years beginning on and after January first, two thousand eighteen, a taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance unless the premium for such insurance increased during the taxable year and such increase was approved after application to and

A. 4944--A 3

by the department of financial services, then the amount of credit allowed for such insurance shall be twenty-five percent of the premium paid during the taxable year for such insurance. In order to qualify for such credit, the taxpayer's premium payment must be for the purchase of or for continuing coverage under a long-term care insurance policy that qualifies for such credit pursuant to section one thousand one hundred seventeen of the insurance law.

§ 5. The insurance law is amended by adding a new section 3216-a to read as follows:

§ 3216-a. Documentation to be provided to long-term care policy holders. (a) All authorized insurers issuing insurance policies subject to the provisions of section one thousand one hundred seventeen of this chapter shall issue to each policy holder an annual statement that includes the following information:

(1) the date such policy took effect;

(2) the age of the insured on the date that such policy took effect;

(3) the original premium amount for such policy;

(4) for each premium increase, if any, the date and amount of such increase;

(5) the total amount of premium paid on such policy for the immediately prior calendar year; and

(6) the total amount of premium paid since the inception of such policy.

(b) For purposes of this section, the term "policy holder" shall mean any person who was a policy holder at any time during the year for which the annual statement is issued.

(c) The annual statement prescribed by this section may be combined with any other statements required to be given to such policy holders and shall be sent to such policy holders by the thirty-first day of January following the year for which the annual statement is issued.

§ 6. The insurance law is amended by adding a new section 4306-h to read as follows:

§ 4306-h. Documentation to be provided to long-term care policy holders. (a) All insurers issuing policies pursuant to the provisions of section four thousand three hundred four of this article and subject to the provisions of section four thousand three hundred six of this article that are for or include long-term care benefits shall issue to each policy holder an annual statement that includes the following information: