Tax Treatment of Long-Term Care Insurance

Individual LTC: premiums are generally not deductible as personal expenses for most Canadian taxpayers (unlike the United States, where a portion of LTC premiums may be deductible as medical expenses). Benefits paid under an individual LTC policy are generally not taxable. This is consistent with the A&S benefit treatment: after-tax premium, tax-free benefit.

Group LTC: similar to group disability, employer-paid premiums are not reported as a current taxable benefit, but if benefits are paid, they may be taxable depending on who funded the premiums. The exam typically focuses on individual LTC and the basic non-taxable benefit rule.