topic Re: Refund of Long Term Insurance Premium in Deductions & credits

Refund of Long Term Insurance Premium

dougreas — Wed, 01 Jan 2025 18:13:49 GMT

My Long Term Insurance program has approved me to receive benefits as of 1/1/2024. I paid premiums every month of 2024. The company plans to send me a reimbursement for those premiums. Generally I have deducted long term care premiums as a part of itemized deductions. I am thinking to keep things simple this year I can book premiums as a receivable and not deduct them. Next year's refund of Long Term Care Insurance premiums would be tax free, right?

Re: Refund of Long Term Insurance Premium

DoninGA — Wed, 01 Jan 2025 18:53:40 GMT

If you do not enter the insurance premiums paid as an itemized deduction on your 2024 Schedule A, you will not have enter the premium refund as taxable income on your 2025 tax return.

Re: Refund of Long Term Insurance Premium

Opus 17 — Wed, 01 Jan 2025 19:35:13 GMT

If you are only talking about 2024, you are correct. If you don't deduct them on your 2024 tax return, you can ignore their return in 2025.

If you are now receiving your benefit because of a medical condition requiring long term care, the benefits are also not taxable. But if premiums are being returned from 2023 or earlier that you did deduct in 2023 or earlier, that would get tricky.