After entering her 1099-R and SSA-1099 in TurboTax, scroll all the way down to Miscellaneous Income, 1099-A, 1099-C. On the next page, scroll all the way down to Other Reportable Income. Say yes to 'other taxable income' and on the next page, for Description enter 'Utah Medicaid Waiver Adjustment' and the Amount that she paid out to her long-term care facility as a negative number.
Since they take most of her funds, her return may show $0 tax due, since the Standard Deduction will be subtracted from any amount of income remaining. Keep program qualifying info for the Medicaid Waiver as documentation, along with a statement of her expenses from the facility with her tax documents.
If that applies, she would not be required to file a return at all, but you could file just for reporting. Here's info on Filing Requirements. Utah follows the same as Federal.
@nadude
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