W 1 ltc 2025

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Generally, benefits received from a tax-qualified long-term care insurance policy are not considered taxable income. This means that if you have a policy that meets the criteria set by the Internal Revenue Service (IRS), the benefits you receive from that policy are typically tax-free.
The law requires tax-qualified policies to pay or reimburse benefits if you are impaired in two out of the following six ADLs: bathing, dressing, transferring, eating, toileting, and continence.
The stated dollar amount of the per diem limitation (guaranteed tax free benefit, or reimbursed amount) is $420 for tax year 2025. In tax year 2024, the limit was $410.
If an employer pays all or a portion of the tax-qualified LTCi premiums on behalf of an employee, the amount paid is deductible by the employer as a business expense. The deduction is not limited by the age-based limits. The entire employer contribution would also be excluded from the employees AGI.
Starting January 1, 2022, employees who work in the state of Washington will pay a mandatory 0.58% payroll tax on all W-2 income with no cap. This tax will fund a state-run long-term care insurance program which can provide up to a maximum of $36,500 of long-term care benefits for care provided in the state.
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State of Washington long-term care benefit The funds to help residents pay long-term care expenses come from payroll tax deductions of 0.58% (or 58 cents per $100) of residents wages. Those payroll deductions started last year, July 1, 2023.
Beginning on January 1, 2022, employers will be required to collect a 0.58% tax on ALL compensation of W-2 employees. So, for every $100 you earn (salary, bonus, stock, etc..) 58 cents will be deducted from your paycheck. Self-employed individuals are not subject to the tax but can opt-in if they choose.

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