My father paid LTCI premiums all during 2024. However, in 2025 due to an illness which started in 2024, he received premium reimbursements. He did receive LTC benefits in 2025 so will probably get some sort of 1099 about receiving benefits. Should I report the entire amount of LTCI premiums paid in 2024 or reduce the amount of premiums paid in 2024 by the amount received in 2025?
It is better to report the premiums in 2024 then do the adjustment by reporting the income in 2025 because it better reflects when the deduction/income was received. There may be some benefit depending on the income for the two years (if there is a large change); otherwise it will likely wash tax-wise, and if you do the adjustment for 2024, you will have to keep track of the transactions.
Thank you MaryK4. To confirm, report the entire amount - let's say $6000 - premiums paid in 2024. Then show a ($2,000) in premiums paid in 2025? Or will I get some sort of 1099 from the LTCI company showing that they reimbursed me $2000 in 2025?
Yes, you can report the entire amount of premiums paid in 2024. See this TurboTax help article for more information about the limits on the deduction based on age for 2024.
You may expect to receive a Form 1099-LTC showing the amount paid for long-term care benefits for 2025.
In most cases, long-term care insurance contracts are treated as accident and health insurance contracts. Amounts you receive from them (other than policyholder dividends or premium refunds) are excludable in most cases from income as amounts received for personal injury or sickness. See IRS Publication 525 for more information.
When you receive benefits under the policy, you can only deduct the medical expenses that exceed the insurance proceeds.
The IRS defines qualified long-term care services as: