The refund is included in the beneficiary's gross income and is taxable,
to the extent it was either excluded from the owner's income or
deducted by the owner. It must be included as income in the year it is
received."
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:
- 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)
- Click
on Start next to Miscellaneous Income at the bottom,
- Choose Reimbursed deductions from a prior year
- Check the box next to 1099-LTC and enter the amount of the full 1099LTC
- then make a duplicate negative entry for the part that is not taxable (if any).
