LTC Policy Surrender

[LauriZ]

My husband and I surrendered our LTC policies in 2023. We were told by the company that they could not tell us if the surrender value would be taxable, but if it was, we would receive a 1099 for our 2023 taxes. As of today (3/10/24) neither of us has received a 1099. I have called them and get the same answer they told me last year when we were deciding whether or not to surrender the policies. We paid in estimated taxes in anticipation of having to pay tax on the surrender value. If I file without the 1099s from the LTC company we get a 20K refund from feds and 11K from state. I assume that will red flag us. If we owe tax on this money I do not want to add on penalties and interest for not paying. Anyone have thoughts? 

[ThomasM125]

It would be best to wait to receive the Form 1099-MISC before you file your tax return. If you received a return on the premiums you paid into the policy, it would be taxable when you receive the cash surrender value payment. You have another month or so until your tax return is due and then you can file an extension if necessary to delay the due date of the return another six months. If you filed and received a refund of the estimated tax payments you made, you could face penalties for late payment of tax if you had to amend your return to pay in additional tax beyond the original due date of your tax return.