The Partnership framework is regulated, but confirm current sales
Regulation 69-44 includes the state Partnership framework. The Department’s published Partnership training guide says producers selling Partnership policies must complete Department-approved training and ongoing training every 24 months. That guide is a published regulatory training document, but it is not a current carrier list or a guarantee that a particular insurer is accepting new applications today (South Carolina Partnership agent training guide; South Carolina Regulation 69-44).
No source located in this research labels South Carolina's Partnership Program closed or legacy-only. At the same time, no current DOI source located here publishes a carrier roster expressly confirming new 2026 Partnership sales. The accurate status is therefore that the program remains regulated and is not documented as closed in the located state material, while actual new-policy availability must be confirmed with a licensed carrier or the Department.
Partnership coverage and Medicaid are related but distinct
A qualifying Partnership policy can matter to Medicaid asset-disregard planning under the applicable state and federal framework, but the policy must actually be certified or identified as a Partnership policy. Do not assume that any long-term-care policy has that feature. Request the policy form, Partnership disclosure, and insurer confirmation before treating it as an asset-protection device (South Carolina Regulation 69-44).
Insurance benefits can also affect cash flow at a time when the family is considering a Medicaid application, an Income Trust, or a community-care waiver. Those are separate decisions. South Carolina's Income Trust law and income-cap policy still require a case-specific eligibility calculation if Medicaid is sought (South Carolina Code Section 44-6-720; SCDHHS MPPM Chapter 304).
Questions to ask before purchase
Ask the producer whether the policy is currently offered in South Carolina, whether it is a certified Partnership policy, how inflation protection works, what events trigger benefits, and what premium increases have occurred on comparable blocks. Ask the Department or carrier for current documentation where an answer affects a purchase decision. That verification is more reliable than relying on an older training document or generic online comparison.
South Carolina insurance finding: DOI Regulation 69-44 maintains the LTC and Partnership framework. The program is not identified as closed in the located state sources, but current new-sales availability should be confirmed directly with a carrier or DOI (
South Carolina Regulation 69-44;
South Carolina DOI LTC page).
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).
South Carolina state incentive: South Carolina offers no separate state credit or deduction for LTC insurance premiums beyond the federal incentives above (
Got LTCi, State Tax Incentives).
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.
