Arizona state Rep. Steve Farley, D-Tucson, Ariz., has introduced House Bill 2713, a bill that could create a long-term care (LTC) savings account program.
One section of the bill would let an Arizona taxpayer deduct long-term care insurance (LTCI) premiums from the amount of income subject to state income taxes.
Another section would let a taxpayer deduct contributions to an LTC savings account from state taxable income.
An LTC account administrator would have a fiduciary duty to the taxpayer and would be responsible for making sure the account assets were spent on LTC expenses.
If a taxpayer spent LTC account assets on other types of expenses, the state would impose a 10% penalty on the withdrawals and include the amount withdrawn in the taxpayer’s taxable income.
The Arizona House has assigned the bill to the Rules, Appropriations, and Health and Human Services committees. The Health and Human Services Committee has approved a replacement for the original text of the bill.