98-025

Request April 14, 1998

REQUEST LETTER

03/23/98

Dear Ms. Solarczyk,

I contacted a Tax Commission Customer Service Representative regarding the Health Care Insurance Premium deduction (Line 17 TC-40) and was referred to the Auditing Division. They requested that I write you for a letter ruling on the question they were not able to answer.

The question: Are insurance premiums for Along term care@ included in the definition of AHealth Care Insurance Premiums@?

It is noted that for the tax year beginning January 1, 1997, the Federal Government allows premiums for Aqualified long-term care insurance contracts@ as eligible medical expenses for purposes of itemized deductions on Schedule A of their Form 1040. I currently have policies for myself and wife that meet the federal definition. May I claim them as part of the calculation for Line 17 as outlined on page 8 of the TC 40 Utah Income Tax Instructions? I recognize I would need to use the worksheet included on page 8 if I have enough medical expense to have a deduction on the Federal Schedule A.

Thank you for your assistance in this matter. I hope to hear from you before the filing deadline for State Income taxes.

Sincerely,

NAME

ADDRESS

CITY STATE ZIP

RESPONSE LETTER

April 14, 1998

NAME

ADDRESS

CITY STATE ZIP

RE: Advisory Opinion - Health Care Insurance Deduction From Income Taxes

Dear NAME,

We have received your request for an advisory opinion concerning the health care insurance deduction that applies to the Utah income tax. You have specifically asked if long-term care insurance is considered health care insurance for purposes of the deduction. Both insurance terms are defined in Title 31A of the Utah Code Ann. From these definitions, we have concluded that “health care insurance” appears to include long-term care insurance. Discussions with the Utah Department of Insurance have confirmed our conclusion.

Thus, for purposes of the health care insurance deduction, as set forth in Utah Code Ann. §59-10-114(2), you may deduct 60% of the amount paid for long-term care insurance to the extent the amounts paid were not deducted from your federal income tax return. Also, please note that any amount of the premium that was reimbursed or funded by the federal or state government is not deductible, and no deduction is allowed if you are eligible to participate in a health plan maintained or funded in whole or in part by you or your spouse’s employer.

Please contact us if you have any other questions.

For the Commission,

Joe B. Pacheco

Commissioner

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