Ronald Reagan Alzheimer's Breakthrough Act of 2005 - S. 602

The above-the-line deduction (whether one itemizes or not) is equal to the age-based amount of LTCI premium for all under age 55 who have had at least four years of continuous coverage under a tax-qualified LTCI plan at the end of 2004. A lower percentage of premium is deductible for those who have had less than four years continuous coverage. For individuals age 55 and older, the requirement for continuous coverage is only two years as of the end of 2004, with lower percentages for shorter periods of coverage. And remember, policies issued prior to 1/1/97 are considered tax-qualified as long as benefits have not been increased since then.

This bill also includes a phased-in caregiver tax credit of $3,000 by 2009 for caregivers with joint adjusted gross annual income up to $150,000 or $75,000 for an individual. The amount of the credit is reduced by $100 for each $1,000 by which the adjusted gross income exceeds the threshold amount.

This bill does not include the provision to pay long-term care insurance premiums within a Section 125 or from a Flexible Spending Account. If those provisions passed, employers would no longer be able to provide LTC insurance to a select class of employees, such as executives only.
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