ARIZONA STATE SENATE
Phoenix, Arizona
CORRECTED
REVISED
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
Joint Legislative Budget Committee estimates that the cost of this subtraction
would be $6.6 million for FY 2002-2003.
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 coverage in a setting other than an acute care unit of a hospital.
4. Contains an effective date for the subtraction from and after December 31, 2001.
Amendments Adopted by Committee
Conforms the definition of long-term care insurance to current statute.
Senate Action
FIN 1/22/01 DPA 7-1-0-0
Prepared by Senate Staff
February 15, 2001