S-Corp Owners: Don’t Miss This Long-Term Care Tax Advantage
By Brian Wheeler
Long-Term Care Planning: A Hidden Tax Opportunity for S-Corp Owners
Most S-Corp owners know that business structure drives how income is taxed — but few realize that it can also influence how long-term care (LTC) insurance premiums are treated.
While C-Corporations enjoy a full deduction for qualified LTC premiums, S-Corporations still have a powerful — and often overlooked — advantage:
With the right policy design, more than half of the premiums can be deductible above-the-line.
That means you can reposition business dollars into an asset that supports your personal financial goals while potentially reducing taxable income.
Why This Matters
Long-term care insurance has evolved beyond the “use it or lose it” policies of the past. Today’s hybrid and asset-based designs can provide multiple layers of value:
Tax-deductible premiums (often 50%+ for S-Corp owners)
Tax-free long-term care benefits if you ever need care
Tax-free death benefit if you never do
Cash value access if plans change
We call it the “Live, Quit, or Die” asset — because no matter which path life takes, the dollars work for you or your family.
A Real-World Example
Let’s say an S-Corp owner in their early 60s funds a policy with $10,000/year in business dollars.
Roughly $5,000+ may be deductible depending on structure and age.
The policy provides over $250,000 in tax-free long-term care coverage.
If never used, it pays a tax-free life insurance benefit to heirs.
That’s significant leverage — and it fits neatly within a coordinated tax and wealth planning strategy.
The Bottom Line
For S-Corp owners, this is one of the rare planning opportunities that checks all three boxes:
Tax advantage. Liquidity. Protection.
If you’re in your 50s or 60s and haven’t reviewed how long-term care fits into your overall plan — or how to structure it through your business — now is the time to explore the options before year-end.
Let’s have a conversation about how this could complement your integrated tax, insurance, and wealth strategy.