AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR CERTAIN PAYMENTS RECEIVED FROM AN INSURANCE COMPANY.

HB 5018 establishes a personal income tax deduction for taxpayers who receive payments from an insurance company to cancel or buy out a long-term care insurance policy. It specifically allows a deduction for the portion of that payment that is already included in federal taxable income. This bill directly affects residents who terminate long-term care insurance policies and receive cash settlements. The key mechanism is aligning state tax treatment with federal rules for these specific insurance-related payments, reducing the state tax burden on that income. The bill does not create new benefits but adjusts tax filing for existing federal taxable events.