(1) As our Nation’s seniors live longer lives, the 
United States faces a major challenge in long-term 
health care needs. 
(2) The United States does not have a com-
prehensive system to support long-term care needs. 
(3) Eighty-six percent of people age 85 and 
older have at least one chronic condition which can 
cause pain, disability, and loss of functioning. 
(4) Long-term care is expected to place a huge 
burden on State Medicaid programs, which are the 
primary source of funding for nursing homes. 
SEC. 3. DEDUCTION FOR QUALIFIED LONG-TERM CARE IN-
SURANCE PREMIUMS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions) is amended by redesig-
nating section 224 as section 225 and by inserting after 
section 223 the following new section: 
‘‘SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE IN-
SURANCE CONTRACTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the applicable percentage of the amount of eligible long- 
term care premiums (as defined in section 213(d)(10)) 
paid during the taxable year for coverage for the taxpayer 
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or any member of the family of the taxpayer under a quali-
fied long-term care insurance contract (as defined in sec-
tion 7702B(b)). 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
subsection (a), the applicable percentage shall be deter-
mined in accordance with the following table: 
‘‘The taxable years beginning in 
calendar year: 
The applicable percentage 
is: 
2011 ..................................................................................
2012 ..................................................................................
2013 or thereafter .............................................................
100. 
‘‘(c) MEMBER OF THE FAMILY.—For purposes of 
this section, the term ‘member of the family’ means, with 
respect to any individual— 
‘‘(1) the spouse of the individual, 
‘‘(2) an ancestor or lineal descendant of the in-
dividual or the individual’s spouse, 
‘‘(3) a brother or sister of the individual or any 
individual described in paragraph (1) or (2), and 
‘‘(4) the spouse of any individual described in 
paragraph (2) or (3). 
‘‘(d) COORDINATION WITH OTHER DEDUCTIONS.— 
Any amount paid by a taxpayer for any qualified long- 
term care insurance contract to which subsection (a) ap-
plies shall not be taken into account in computing the 
amount allowable to the taxpayer as a deduction under 
section 162(l) or 213(a).’’. 
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(b) LONG-TERM CARE INSURANCE PERMITTED TO 
BE OFFERED UNDER CAFETERIA PLANS AND FLEXIBLE 
SPENDING ARRANGEMENTS.— 
(1) CAFETERIA PLANS.— 
(A) Section 125(f) of the Internal Revenue 
Code of 1986 (defining qualified benefits), as in 
effect for taxable years beginning before Janu-
ary 1, 2014, is amended by inserting before the 
period at the end ‘‘; except that such term shall 
include the payment of premiums for any quali-
fied long-term care insurance contract (as de-
fined in section 7702B) to the extent the 
amount of such payment does not exceed the el-
igible long-term care premiums (as defined in 
section 213(d)(10)) for such contract’’. 
(B) Section 125(f)(2) of such Code, as in 
effect for taxable years beginning after Decem-
ber 31, 2013, is amended by inserting before 
the period at the end ‘‘; except that such term 
shall include the payment of premiums for any 
qualified long-term care insurance contract (as 
defined in section 7702B) to the extent the 
amount of such payment does not exceed the el-
igible long-term care premiums (as defined in 
section 213(d)(10)) for such contract’’. 
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(2) FLEXIBLE
SPENDING
ARRANGEMENTS.— 
Section 106 of such Code (relating to contributions 
by an employer to accident and health plans) is 
amended by striking subsection (c). 
(c) CONFORMING AMENDMENTS.— 
(1) Section 62(a) of the Internal Revenue Code 
of 1986 is amended by inserting after paragraph 
(21) the following new item: 
‘‘(22) PREMIUMS
ON
QUALIFIED
LONG-TERM 
CARE
INSURANCE
CONTRACTS.—The deduction al-
lowed by section 224.’’. 
(2) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by 
striking the last item and inserting the following 
new items: 
‘‘Sec. 224. Premiums on qualified long-term care insurance contracts. 
‘‘Sec. 225. Cross reference.’’. 
(d) EFFECTIVE DATES.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2010. 
SEC. 4. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE 
NEEDS. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to nonrefundable personal credits) is 
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amended by inserting after section 25D the following new 
section: 
‘‘SEC. 25E. CREDIT FOR TAXPAYERS WITH LONG-TERM 
CARE NEEDS. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—There shall be allowed as a 
credit against the tax imposed by this chapter for 
the taxable year an amount equal to the applicable 
credit amount multiplied by the number of applica-
ble individuals with respect to whom the taxpayer is 
an eligible caregiver for the taxable year. 
‘‘(2) APPLICABLE CREDIT AMOUNT.—For pur-
poses of paragraph (1), the applicable credit amount 
shall be determined in accordance with the following 
table: 
‘‘For taxable years beginning in 
calendar year: 
The applicable credit 
amount is: 
2011 ..................................................................................
$1,000
2012 ..................................................................................
$1,500
2013 ..................................................................................
$2,000
2014 ..................................................................................
$2,500
2015 or thereafter .............................................................
$3,000. 
‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) shall be reduced (but 
not below zero) by $100 for each $1,000 (or fraction 
thereof) by which the taxpayer’s modified adjusted 
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gross income exceeds the threshold amount. For 
purposes of the preceding sentence, the term ‘modi-
fied adjusted gross income’ means adjusted gross in-
come increased by any amount excluded from gross 
income under section 911, 931, or 933. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
paragraph (1), the term ‘threshold amount’ means— 
‘‘(A) $150,000 in the case of a joint re-
turn, and 
‘‘(B) $75,000 in any other case. 
‘‘(3) INDEXING.—In the case of any taxable 
year beginning in a calendar year after 2011, each 
dollar amount contained in paragraph (2) shall be 
increased by an amount equal to the product of— 
‘‘(A) such dollar amount, and 
‘‘(B) the medical care cost adjustment de-
termined under section 213(d)(10)(B)(ii) for 
the calendar year in which the taxable year be-
gins, determined by substituting ‘August of 
2010’ for ‘August of 1996’ in subclause (II) 
thereof. 
If any increase determined under the preceding sen-
tence is not a multiple of $50, such increase shall 
be rounded to the next lowest multiple of $50. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
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