Long-term Care Contracts Purchased with Retirement Plan Distributions

Long-term care contracts purchased with retirement plan distributions. This provision will permit retirement plans to distribute up to $2,500 per year for the payment of premiums for certain specified long term care insurance contracts. Such distributions are exempt from the 10% excise tax on early distributions. However, only policies that provide for “high-quality coverage” qualify.

Applicable plans: 401(a), 401(k), 403(b) and 457(b) plans, IRAs .

Effective 12/29/2025.