Are LTC premium reimbursements from a return of premium rider every 10 years taxable?

[llbetz]

We have a long term care policy that has a return of premium rider where we receive a premium reimbursement every 10 years.  Is that reimbursement taxable since there are no LTC expenses incurred?

[CathiM · Accepted solution]

If you took a deduction for your long term care premiums as a medical expense in previous years (Schedule A itemized deductions), you need to report it as a "reimbursed deduction from a prior year". If you did not take the deduction, it is not taxable income.

Here is how to enter it to line 21 in TurboTax:

Under Wages & Income tab: 

1. On Your Income screen, scroll way down below All Income to Less Common Income open the menu (if you don't see All Income, click on Add more income first and you will see it)
2. Click on Start next to Miscellaneous Income at the bottom, 
3. Choose Reimbursed deductions from a prior year
4. Check the box next to Medical Expenses