For tax years beginning on or after January 1, 2000, an income tax credit is available for Colorado residents who purchase or pay premiums on a long-term care insurance policy. The credit is equal to 25% of the amount paid for the insurance during the year. [C.R.S. 39-22-122].
Limitations
The amount of the credit claimed may not exceed $150 per policy. The credit used cannot exceed the amount of the net tax liability. Any unused portion of the credit may not be carried forward to future years.
The credit may only be claimed by:
- an individual filing a single return with federal taxable income of less than $50,000 for the year;
- two individuals filing a joint return with federal taxable income of less than $50,000 for the year, and claiming a credit for one insurance policy; or
- two individuals filing a joint return with federal taxable income of less than $100,000 for the year, and claiming a credit for two insurance policies, or for a joint policy that covers each individual separately.
Nonresidents and Part-Year Residents
Nonresidents of Colorado may not claim the long-term care insurance. Part-year residents may claim the credit only if the expense is incurred during that part of the year the individual covered by the policy is a Colorado resident.
For more information, see our knowledge base or FYI 37 on the Colorado website.
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