Long Term Care policy premium deduction - NY State

[Turinuit2020]

In the past we claimed a credit for LTC premiums paid during the year on form IT-249.  In TurboTax Delux 2020, when I click on NY credits and taxes/LTC insurance and premiums paid in 2020, the questions ask about partnerships, shareholders in S Corporations, and beneficiary in estate or trust.  It doesn't ask us what premiums were paid as in previous years.  Is there an error in the program or do the premiums get recorded somewhere else?

[vernon123]

nys IT-249 2020 has section for schedule A individual  not schedule B which is what turbotax is requesting  data from paternership, s corporation, or estate. This was not the case in 2019 for long term care insurance tax credit.

Need Turbotax to allow tabling data for schedule A section for NYS IT-249 2020 . 

[DaveF1006 · Accepted solution]

This is normally entered as a medical expense. Let's first enter this into the federal interview section and then the information should populate in your NYS return.

1. Open or log into Turbo Tax
2. go to federal>deductions and credits>medical>medical expenses
3. as you move through the screens, there will be a section that appears that says How much did you spend on insurance premiums? Here is where you indicate how much you spent in premiums.  It has a separate entry (entries) for LTC premiums.
4. Now go to state and prepare your NYS return.
5. After the information is populated, go to tax tools>tools>view tax summary
6. Look at your NY Tax summary and look under New York State Credits.
7. You should see a credit up to $1500 because that is the limit you can claim for tax years beyond 01/01/2020

It was confusing because when you selected Long Term Care Insurance Premiums Paid in 2020 in your NYS return, it mentioned K-1 information but if you did not have a K-1, then this doesn't pertain to you. Enter your LTC premiums like i mentioned above and this will populate in your NYS automatically as a credit up to $1500.

[neilpro]

I am not having success getting my NYS tax credit for LTC Insurance. First, I entered it in the NYS section "Long Term Care Insurance Premiums Paid in 2020." I believe this is where I entered it in previous years. It also asks if I was a partner in a partnership, etc., all of which I am not. I found an explanation here that said I should instead enter it into my Federal return under medical expenses. I did this, and now those premiums are shown in the Federal Medical Expenses Worksheet. I do not have high medical expenses, so this does not affect my Federal Taxes. I zeroed the "Long Term Care Insurance Premiums Paid in 2020" in my NYS taxes when I returned the NYS tax return. But, I am still not getting the LTC Insurance credit in my NYS tax return.  IT-249 shows the correct credit. But, there is no Form ITT-201-ATT and my return, ITT-201, line 42 is blank. 

Is there a problem with the software, or can I please get expert advice on how to make the LTC credit work for my NYS return?

[Syntaxx]

I have the same issue.  Is there a resolution in Turbotax?  I didn't see one posted.

[PattiF]

From expert Lena H: 

For tax years starting on or after January 1, 2020, the current year long-term care credit is limited to $1,500. In addition, you must answer questions on your New York Return before this credit is on your state return.

Please follow the instructions below:

1. Open your return.
2. Click on State.
3. Edit New York.
4. On the page titled Take a look at New York Credits and Taxes, select Start next to Long Term Care Insurance Premiums Paid in 2022.
5. Answer the question on whether you were a partner in a partnership, shareholder of an S Corp, or beneficiary of an estate or trust.
6. On your New York State Tax Summary, you should see a maximum deduction of $1,500 listed under Nonrefundable Credits.

And from @ErnieSO

The New York Long-Term Care Insurance Credit is a non-refundable credit. It can only bring your NY tax liability to $0.

If your New York State Household Credit and Resident Credit are large enough to bring your NY tax liability to $0 before the application of the LTC Credit, then the LTC Credit will not show up on your return.

TurboTax will automatically transfer the appropriate long-term insurance premium payment you entered as federal medical expenses onto the New York return.

Check your forms. Do you have Form IT-249, Credit for Long-Term Care Insurance Credit? If so, it means TurboTax transferred the number, but it was not used.

@Syntaxx 

[Syntaxx]

Thank you @ErnieSO, that answers my question! Another question, can the credit be carried forward, and if so, for how long?

[PattiF]

Yes, the credit can be carried forward with no time limit mentioned in the instructions for Form IT-249.

From the NY Tax Bureau: 

"This credit is not refundable. If the amount of credit exceeds the taxpayer’s tax for the year, the excess may be carried over to the following year or years".

@Syntaxx