VA tax question - LTC premiums

[FEDUKE404]

Out-of-state client has payments made for long-term care premiums, not deducted on federal return. VA has an adjustment for such premiums beginning with tax year 2006.

However:
§ 58.1-339.11. Long-term care insurance tax credit.

A. For taxable years beginning on or after January 1, 2006, any individual shall be entitled to a credit against the tax levied pursuant to § 58.1-320 for certain long-term care insurance premiums paid by the individual during the taxable year pursuant to an insurance policy entered into on or after January 1, 2006.

Does this mean that if a person continued to pay premiums in 2007 on a policy that was established in 2001, there is no adjustment but a different person paying the same premiums for a "new" policy could deduct the premiums?

That's the way I read it........any Commonwealth of Virginia experts out there?

Thanks in advance!

FE

[Burke]

Out-of-state client has payments made for long-term care premiums, not deducted on federal return. VA has an adjustment for such premiums beginning with tax year 2006.
However:
§ 58.1-339.11. Long-term care insurance tax credit.
A. For taxable years beginning on or after January 1, 2006, any individual shall be entitled to a credit against the tax levied pursuant to § 58.1-320 for certain long-term care insurance premiums paid by the individual during the taxable year pursuant to an insurance policy entered into on or after January 1, 2006.
Does this mean that if a person continued to pay premiums in 2007 on a policy that was established in 2001, there is no adjustment but a different person paying the same premiums for a "new" policy could deduct the premiums?
That's the way I read it........any Commonwealth of Virginia experts out there? Thanks in advance!

FE

LTC subtraction has been around longer than that. Current Form 760 instructions say "Enter the amt of prems pd for LTC insurance provided they have not been deducted on fed, AND you have not claimed the VA LTC credit." So yes to the question above about CREDIT on Sche CR; however should qualify for SUBTRACTION (Code 106)

[FEDUKE404]

Old VA rules vs new

Thanks, Burke. I do not recall in the past preparing any VA returns with a LTC issue. This issue is for a prior client who moved to VA (and maintained accountant allegiance!)

I'm still a bit confused as to why the verbiage related to 01/01/2006 is placed in the statute cited. One would think something is significant about that date.

FE

[Burke]

Thanks, Burke. I do not recall in the past preparing any VA returns with a LTC issue. This issue is for a prior client who moved to VA (and maintained accountant allegiance!)

I'm still a bit confused as to why the verbiage related to 01/01/2006 is placed in the statute cited. One would think something is significant about that date.

FE

That is the first year the credit was allowed and that is the way the General Assembly passed the bill. The subtraction (when it came out) worked the same way. I cannot explain the reasoning behind it.