A Colorado resident who purchases or makes a payment for a long-term care insurance policy may be able to claim a Long-Term Care Insurance credit. To qualify for the credit, the individual or spouse listed on the income tax return must also be the policyholder of such insurance. [§39-22-122, C.R.S.]
Only one qualifying policy may be claimed per individual filing a return. A jointly-held policy between spouses shall be treated as a single policy.
The amount of the credit cannot exceed 25% of the total amount paid toward such insurance during the taxable period.
The maximum credit per policy is $150 or $300 for a married couple with two separate policies.
The credit amount cannot exceed the total Colorado income tax liability for the period.
Any unused portion of the credit may not be carried forward to a future tax period nor shall it be refunded.
To qualify for the credit, the total federal taxable income cannot exceed:
● $50,000 for an individual filing a single return or two individuals filing a joint return and who are claiming the credit for one policy (single);
● $100,000 for two individuals filing a joint return and who are claiming the credit for two separate insurance policies or for a joint policy that covers each individual separately.
NONRESIDENTS AND PART-YEAR RESIDENTS OF COLORADO
Nonresidents of Colorado may not claim the long-term care insurance credit.
Part-year residents may claim the credit only if the expense is incurred during that part of the year the individual covered by the policy is a Colorado resident.
When claiming this credit, be sure to include with your return any year-end statement during the tax year for which the credit is claimed that discloses the premiums paid for each policy. Failure to provide the appropriate documentation may result in denial of the credit. Credit denials may be protested by sending the required documentation. Documents may be submitted electronically through the E-Filer Attachment function of Revenue Online at
www.Colorado.gov/RevenueOnline or by attaching to a paper return.
For more information, see FYI 37 on the Colorado website: