ARIZONA STATE SENATE
Phoenix, Arizona
CORRECTED
long-term care insurance;
tax incentive
Purpose
Effective tax year 2002,
allows taxpayers to subtract long-term care insurance premium costs from their
Arizona gross income (AGI).
Background
Long-term care encompasses a
broad range of services, from assistance with daily activities to
highly-skilled medical intervention, provided to an individual over a prolonged
period of time or for the duration of the individual’s life. The potential cost of such intensive and
lengthy health care can be high.
Federal, state, and local policymakers nationwide are engaged in policy
planning to find solutions to the expensive problem of long-term care insurance. This bill allows taxpayers to subtract
long-term care insurance premium costs from their AGI to reduce their income
tax liability.
The estimated fiscal impact
of this bill has yet to be determined.
Provisions
1. Allows taxpayers to subtract long-term care insurance premium costs attributable to the taxpayer or any other person, regardless of the person’s relationship to the taxpayer, from their AGI.
2. Disallows any premium amount subtraction if that premium amount has already been subtracted from a taxpayer’s AGI.
3. Defines “long-term care insurance coverage” as a policy that provides benefits in various community-based settings for at least 12 months.
4. Contains an effective date for the subtraction from and after December 31, 2001.
Prepared by Senate Staff
January 19, 2001