A NYS form 196 program bug?

[mnfriedman1]

 I pay long term care insurance premiums. Thanks to the new federal tax law I am able to itemize for 2025 and have a small medical deduction on my 1040. But due to NYS using a 10% threshold instead of the federal 7.5%, I do not have a medical deduction included in NYS itemized deductions. None. Nevertheless, the Turbotax program is adding back some percentage of the premium on Form 196, thereby reducing my NYS itemized deduction. That makes no sense to me. Before I tell Turbotax they have a bug, I thought I’d ask someone who might actually know for sure. Thanks.

[MarilynG1]

New York offers a separate, non-refundable deduction for Long Term Care Insurance Premiums.  Look for a screen in the NY interview 'Take a look at NY Credits and Taxes'.  

Here's more info from NY Dept. of Taxation.

@mnfriedman1 

[mnfriedman1]

Hello, thanks for your reply but I think you have missed my point.

I am aware that there is a NYS credit for Long Term Care Insurance premiums that phases out based on income. I have claimed the credit and am not subject to the phaseout.  I am also aware that NYS itemized medical deduction must be decreased by the amount of the LTC credit claimed. Due to the NYS 10% threshold to deduct medical expenses, there is no medical deduction claimed on the NYS return.

My point is that the program is apparently adding back on Form 196 a portion of the medical expense allowed on my 1040, in order to adjust for the different federal and NYS thresholds. That is, the federal has a 7.5% threshold and NYS 10%.  But due to the NYS 10% rule there is no allowable medical deduction on my NYS return. So why should there be an add back?

[AmyC]

NY begins the tax return with the federal AGI. Form IT-196 begins with the federal itemized deductions. Even though there is no state deduction, there was a little on the federal.  The addback should match what was allowable on the federal Sch A.

The credit is allowed when no other LTC expenses are claimed so this clears the path for you to take the credit.

Your logic makes sense but the program follows state rules.

[mnfriedman1]

I accept your answer and thanks, but the result makes no sense to me.