NU Online News Service, July 11, 5:44 p.m. — Louisiana Gov. Murphy Foster Jr., a Republican, has signed H.B. 55, a bill that creates a state income tax credit for Louisiana residents who buy long-term care insurance.
H.B. 55 lets individuals subtract up to 10% of the cost of their annual LTC premiums from their total state income taxes.
The credit cannot exceed a taxpayer’s total state tax liability in any given year.
To qualify for the credit, a resident must buy an LTC policy approved for sale in Louisiana that qualifies for special tax treatment under the federal income tax rules.
Federal law allows individual taxpayers who itemize their medical expenses to deduct some of their LTC premiums from taxable income when the policies meet strict federal eligibility standards.
The original version of H.B. 55, introduced in April by Rep. Robert Facheux Jr., LaPlace, La., would have made the LTC premium tax credit available to individuals who bought “non-qualified” LTC policies as well as purchasers of policies that qualified for the federal tax deduction.
The original version would have also let taxpayers subtract as much as 100% of their LTC premiums from their state income taxes.
The final, less generous version of H.B. 55 enjoyed nearly unanimous support in the Louisiana Legislature: it passed 102-0 in the House and 37-0 in the Senate. Three representatives and two senators happened to be absent during the votes.
But H.B. 55 has faced skepticism about its possible effects on state tax revenues.