Qualified long-term care distributions
(A) In general .—
(A)In general .—#
A trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing qualified long-term care distributions.
(B)Qualified long-term care distribution .—#
For purposes of this paragraph—
(i) In general .— The term “qualified long-term care distribution” means so much of the distributions made during the taxable year as does not exceed, in the aggregate, the least of the following: (I) The amount paid by or assessed to the employee during the taxable year for or with respect to certified long-term care insurance for the employee or the employee’s spouse (or other family member of the employee as provided by the Secretary by regulation). (II) An amount equal to 10 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan. (III) $2,500.
(ii) Adjustment for inflation .— In the case of taxable years beginning after December 31, 2024 , the $2,500 amount in clause (i)(II) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2023” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.
(B)(i)In general .—#
The term “qualified long-term care distribution” means so much of the distributions made during the taxable year as does not exceed, in the aggregate, the least of the following:
(I) The amount paid by or assessed to the employee during the taxable year for or with respect to certified long-term care insurance for the employee or the employee’s spouse (or other family member of the employee as provided by the Secretary by regulation).
(II) An amount equal to 10 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan.
(III) $2,500.
(C)Certified long-term care insurance .—#
The term “certified long-term care insurance” means—
(i) a qualified long-term care insurance contract (as defined in section 7702B(b)) covering qualified long-term care services (as defined in section 7702B(c)),
(ii) coverage of the risk that an insured individual would become a chronically ill individual (within the meaning of section 101(g)(4)(B)) under a rider or other provision of a life insurance contract which satisfies the requirements of section 101(g)(3) (determined without regard to subparagraph (D) thereof), or
(iii) coverage of qualified long-term care services (as so defined) under a rider or other provision of an insurance or annuity contract which is treated as a separate contract under section 7702B(e) and satisfies the requirements of section 7702B(g),
if such coverage provides meaningful financial assistance in the event the insured needs home-based or nursing home care. For purposes of the preceding sentence, coverage shall not be deemed to provide meaningful financial assistance unless benefits are adjusted for inflation and consumer protections are provided, including protection in the event the coverage is terminated.
(C)(i)#
a qualified long-term care insurance contract (as defined in section 7702B(b)) covering qualified long-term care services (as defined in section 7702B(c)),
(C)(ii)#
coverage of the risk that an insured individual would become a chronically ill individual (within the meaning of section 101(g)(4)(B)) under a rider or other provision of a life insurance contract which satisfies the requirements of section 101(g)(3) (determined without regard to subparagraph (D) thereof), or
(D)Distributions must otherwise be includible .—#
Rules similar to the rules of section 402(l)(3) shall apply for purposes of this paragraph.
(E)Long-term care premium statement.—#
(i) In general .— No distribution shall be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the employee has been filed with the plan.
(ii) Long-term care premium statement .— For purposes of this paragraph, a long-term care premium statement is a statement provided by the issuer of long-term care coverage, upon request by the owner of such coverage, which includes— (I) the name and taxpayer identification number of such issuer, (II) a statement that the coverage is certified long-term care insurance, (III) identification of the employee as the owner of such coverage, (IV) identification of the individual covered and such individual’s relationship to the employee, (V) the premiums owed for the coverage for the calendar year, and (VI) such other information as the Secretary may require.
(iii) Filing with secretary .— A long-term care premium statement will be accepted only if the issuer has completed a disclosure to the Secretary for the specific coverage product to which the statement relates. Such disclosure shall identify the issuer, type of coverage, and such other information as the Secretary may require which is included in the filing of the product with the applicable State authority.
(E)(i)In general .—#
No distribution shall be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the employee has been filed with the plan.