Generally, payments received under a long-term care insurance contract are excluded from income. For the per diem payments, the exclusion amount is limited. Taxable amounts are reported on Form 8853,
Any amount paid in excess of the per diem limit is taxable. The per diem limit for 2020 is $380. For 2019, the amount is $370.
You do not need to put the expenses anywhere in your case. You simply claim the excess income.
Example:
LTC pays you for 100 days of LTC at $500/day for $5,000.
The limit is $370/ day or $3,700 total
This leaves $5,000 - $3,700 = $1,300 as taxable income.
Only report the income, not the expenses.
@lglhmi
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