Correct. If your policy costs were higher than what you received upon cancellation then the amount is not taxable.
You should report the 1099-MISC on your tax return, The IRS does not know how much you paid in premiums and will assume you did not report it.
You can enter it as Other Reportable Income and on the next line include a negative for same amount (you can't claim a loss) for premiums paid. Reference the 1099 in your description, such as Long-term care account distributions (Form 1099-MISC)
- In TurboTax Online click on Federal on the left column
- Click on Wages & Income at the top
- Scroll down to Miscellaneous Income, 1099-A, 1099-C. Start
- Choose Other reportable income
- Say Yes to Any Other Taxable Income?
- In Other Taxable Income, enter a Description and Amount
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