Income Tax - Credit for Long-Term Care Premiums (Long-Term Care Relief Act of 2023)
Impact
If enacted, SB137 would amend existing tax code provisions to expand the coverage of long-term care insurance premiums that qualify for tax credits. This expansion is expected to encourage more residents to purchase long-term care insurance, potentially leading to increased coverage for Maryland residents. The bill stipulates that the maximum credit cannot exceed 20% of the eligible premiums paid or $2,000, whichever is lesser, providing significant savings for qualified taxpayers while incentivizing financial planning for long-term care needs.
Summary
Senate Bill 137, known as the Long-Term Care Relief Act of 2023, seeks to provide a financial incentive for Maryland residents to invest in long-term care insurance by altering the eligibility criteria and the maximum credit amount against the state income tax for long-term care premiums. The bill is designed to ease the financial burden of long-term care costs for taxpayers with an adjusted gross income of less than $250,000. It allows eligible taxpayers to claim a credit equal to 100% of the premiums paid for long-term care insurance, subject to certain limitations.
Contention
Opposition to SB137 may arise from concerns regarding the adequacy of the credit and its effectiveness in truly making long-term care insurance affordable for all residents. Critics may argue that the income cap of $250,000 should be reconsidered to include more residents, particularly those at moderate incomes who might also struggle with long-term care costs. Furthermore, there might be anxiety regarding the long-term fiscal implications for the state budget should the adoption of these credits lead to increased claims and thus diminish tax revenue.