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Maine Tax Qualified And Tax Certified Long Term Care Insurance Policies
Starting with Tax Year 2002: New Tax Certification Program For Deducting Long Term Care Insurance Premiums on Maine Income Tax Returns
Maine’s history of income tax incentives for long term care insurance premiums is in three stages, the latest may not yet be widely known:
- Premiums were deductible on individual and corporate Maine tax returns for any long term care (LTC) policy or contract the Superintendent of Insurance, through 1999, certified as eligible for the tax incentives in Title 36 M.R.S.A. §§ 5122 et seq. Once certified, the policy or contract became and remains entitled to the incentives in all tax years in which the deduction is claimed.
- Effective January 1, 2000 a new LTC insurance law, Title 24-A M.R.S.A. §§ 5071-80, expanded the range of Maine plans eligible for deduction of paid premiums. Under this law, if a contract is federally qualified, no matter when the qualification occurred, starting with tax year 2000 it is also Maine qualified. Conversely, federally non-qualified plans are automatically Maine non-qualified. (Adoption of the federal standard does not affect plans certified under the former LTC law. These plans continue their Maine tax eligibility.)
- The most recent statutory change, Title 24-A M.R.S.A. § 5075-A, makes all post-1999 LTC policies and contracts, not otherwise Maine certified or qualified, eligible for tax incentives. Section 5075-A establishes a new certification program, which allows the insurer to request certification for tax years beginning January 1, 2002, for any plan issued after January 1, 2000.
The process for the insurer to obtain the Superintendent’s tax certification letter is simple. Under § 5075-A(3), the plan becomes entitled to tax incentives when the Superintendent certifies in writing that the form complies with the standards and other requirements of Title 24-A M.R.S.A. Chapters 27, 33, 35, and 68-A and Bureau of Insurance Rules, and is certified as an approved LTC policy or contract. Following each certification, the Bureau will transmit a copy of the Superintendent's letter to Maine Revenue Services, with an updated list of certified forms.
The list of all certified plans, pre-2000 and the § 5075-A forms
are available on the Bureau's Internet website, www.maine.gov/pfr/insurance
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