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What is a Nebraska long-term care savings plan account?
Who can establish a long-term care savings plan account?
How much can be contributed to a long-term care savings plan account?
How can the money in a long-term care savings plan account be invested?
Is there a tax advantage to contributing to a long-term care savings plan account?
When can money be withdrawn from a long-term care savings plan account?
What are “long-term care expenses” eligible to be paid from a long-term care savings plan account?
What are “long-term care insurance premiums” eligible to be paid from a long-term care savings plan account?
What is a Nebraska long-term care savings plan account?
A Nebraska long-term care savings plan account is a deposit or investment account established with a participating bank, savings bank, credit union, other financial institution, or subsidiary.
Who can establish a long-term care savings plan account?
Any individual may establish an account in his or her name.
How much can be contributed to a long-term care savings plan account?
An individual may contribute up to $165,000.00 (indexed for inflation) to a Nebraska Long-Term Care Savings Plan Account during the individual’s lifetime. As explained below, a Nebraska income tax deduction is available for contributions of up to $1,000 per person ($2,000 per joint return) per year.
How can the money in a long-term care savings plan account be invested?
The funds can be invested in any form of account offered by the qualified participating financial institution.
Is there a tax advantage to contributing to a long-term care savings plan account?
Yes. For Nebraska income tax purposes, an individual with a long-term care savings plan account can generally reduce his or her adjusted gross income by the amount of contributions made to such an account, up to a $1,000 reduction (or up to $2,000 for a married individual filing a joint return) each year. In addition, all the earnings on the account can generally be excluded from adjusted gross income for Nebraska income tax purposes. NOTE: Contributions and earnings are currently NOT excluded from adjusted gross income for federal income tax purposes.
When can money be withdrawn from a long-term care savings plan account?
Funds can be withdrawn without penalty from a long-term care savings plan account under the following circumstances:
- If the Account owner during the year of the withdrawal, incurred a long-term expenses for themselves or a spouse during the taxable year; or
- If the Account owner turns 50 during the year of the withdrawal and uses the funds during the taxable year of the withdrawal to pay or reimburse long-term care insurance premiums. Funds may be withdrawn by the Account owner for any other purposes, BUT a 10% penalty is imposed on the amount withdrawn.
- If the Account owner uses the funds during the taxable year of withdrawal to pay or reimburse long-term care insurance premiums for a person to whom they have an insurable interest.
What are “long-term care expenses” eligible to be paid from a long-term care savings plan account?
“Long-term care expenses” means the cost of long-term care in a long-term care facility and the cost of care provided in a person’s home when the person receiving the care is unable to perform multiple basic life functions independently.
What are “long-term care insurance premiums” eligible to be paid from a long-term care savings plan account?
“Long-term care insurance premiums” means premiums paid for a long-term care insurance policy issued pursuant to the Long-term Care Insurance Act that offers coverage to the individual or the individual’s spouse.
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