The NYS Partnership remains relevant for current policyholders
No insurer has sold new New York State Partnership for Long-Term Care-qualified policies since January 1, 2021, but existing policyholders retain their benefits, including the program's Medicaid asset-protection feature (NYS DFS Partnership overview; NYS Partnership for Long-Term Care).
As of December 31, 2024, DFS reported 53,721 people enrolled in New York Partnership policies and 336,000 people enrolled in non-Partnership long-term care policies statewide (DFS 2025 LTC Insurance Biennial Report).
2026 Partnership minimum daily benefits: $415 for nursing-home care and $207 for home care. These figures describe Partnership policy standards, not a promise that a particular policy will cover every service or cost (
NYS Partnership 2026 consumer brochure).
Reciprocity and Medicaid planning need policy-specific review
New York Partnership policies have been reciprocal with other state Partnership programs since June 1, 2012, except California, Massachusetts, Vermont, Alaska, Hawaii, and Mississippi (NYS Office for the Aging HIICAP training module).
The official Partnership Medicaid workbook explains that non-periodic income is counted only in the month received and then becomes a countable resource, illustrating why policy benefits and Medicaid budgeting should be analyzed together (NYS Partnership Medicaid Eligibility Workbook).
Review an existing policy before changing it
Existing Partnership coverage is materially different from a newly purchased conventional policy because new Partnership sales have stopped in New York. See the Traditional LTC Insurance pillar and compare another state market on the Florida long-term care insurance page.
A licensed insurance professional and a New York-licensed elder-law attorney can help evaluate an existing policy's benefits, Partnership status, and Medicaid-planning implications before it is replaced, surrendered, or relied on for care.
Federal Tax Incentives for LTC Insurance Premiums (2026)
Beyond any state-level benefit, a tax-qualified LTC insurance contract (one meeting IRC § 7702B)
carries several federal tax benefits, and a number of the relevant limits increased for 2026:
- Age-based premium deduction: eligible premiums count as a medical expense on
Schedule A (to the extent total unreimbursed medical expenses exceed 7.5% of AGI), up to 2026 limits
of $500 (age 40 or younger), $930 (41–50), $1,860 (51–60), $4,960 (61–70), and $6,200
(over 70) — all increased from 2025 (IRS Revenue Procedure 2025-32, § 4.27).
- Self-employed and business deductions: self-employed individuals can deduct 100%
of eligible premiums up to the same age-based limits without itemizing, and C-corporations can generally
deduct LTC premiums paid for employees as an ordinary business expense under IRC § 162, uncapped by
the individual age-based limits.
- Tax-free benefits: benefits from a tax-qualified contract are generally excluded
from income under IRC § 7702B(d); per-diem/indemnity contracts are tax-free up to $430/day (about
$13,079/month) for 2026 (IRS Revenue Procedure 2025-32, § 4.62).
- HSA-funded premiums: HSA funds can be withdrawn tax-free to pay eligible LTC
premiums, up to the same age-based limits above.
- New for 2026 — penalty-free retirement withdrawals: SECURE 2.0 Act § 334
lets eligible 401(k), 403(b), and governmental 457(b) participants under 59½ withdraw funds to pay
premiums on a certified LTC contract without the usual 10% early-withdrawal penalty, up to the least of
the actual premium paid, 10% of the vested account balance, or a statutory cap of $2,600 for 2026. The
distribution itself is still fully taxable as ordinary income and is not available from IRAs
(IRS Notice 2026-33).
New York state incentive: New York offers a personal income tax credit equal to 20% of premiums paid during the year (capped at $1,500, AGI under $250,000), plus corporate and S-corp versions with carryforward — on top of the federal incentives above (
NY Dept. of Taxation and Finance).
State tax rules change frequently and the credit/deduction summary above is not exhaustive —
confirm current eligibility, forms, and amounts with your state department of revenue or a tax
professional before relying on any figure here.
Not mutually exclusive. Most families combine two or three funding pillars — this one rarely stands alone.
The
Journey Assessment ranks all ten pillars against your specific situation and
recommends the top three.
