Proper handling of Form 1099-LTC benefits received

[BarryDGreen]

I have recently received a Form 1099-LTC on my deceased mother's behalf.  She died in 2024, and I subsequently filed a benefit claim with her LTC insurance company.  I eventually received a one-time benefit payment in 2025. The LTC benefit amount I received is reported in Box 1 of the 1099-LTC form.  Box 3 has a "X" checked for "reimbursed amount".  Box 4, Qualified contract, is checked.

As I understand, since the Box 3 identifies the amount paid as being a "reimbursed" payment, the amount in Box 1 is NOT TAXABLE.  However, it gets a bit confusing as I try to fill out the questionnaire on Turbo Tax.

In Turbo Tax, do I check YES that I received a distribution for a LTC contract, and YES that I inherited the LTC contract?  If so, then Turbo Tax ask if I received a per diam payment or an accelerated death benefit.  As the payment was a "reimbursement", do I answer NO to this question?

[CatinaT1 · Accepted solution]

Since your form has Box 3 (Reimbursed Amount) and Box 4 (Qualified Contract) checked, you are correct: this money is not taxable. It is simply a "repayment" for medical expenses your mother incurred before she passed.

You will answer the questions this way:

1. "Did you receive a distribution from a Long-Term Care contract?" Select YES. (Even though it was for your mother, you are the recipient of the check and the form).
2. "Did you inherit this contract?" Select YES.
3. "Did you receive a per diem payment or an accelerated death benefit?" Select NO.
4. Leave the box blank (or enter $0) for both Per Diem Gross Benefits and Accelerated Death Benefits.
5. Enter the qualified expenses and the amount that were reimbursed from Box 1 on the LTC Costs screen. These boxes should have the same numbers. You can leave number of days empty.

This will make the amount non-taxable.

[BarryDGreen]

That is clear.  Thank you.

[Oscar Zilch]

Where did you find the Form 1099-LTC? I cannot find it anywhere in TurboTax Deluxe. Thanks for any help.

[DoninGA]

@Oscar Zilch 

To enter a Form 1099-LTC -

Click on Federal Taxes (Personal using Home & Business)

Click on Wages & Income (Personal Income using Home & Business)

Click on I'll choose what I work on (if shown)

Scroll down to Less Common Income

On Miscellaneous Income, 1099-A, 1099-C, click the start or update button

On the next screen - On Long-term care account distributions (Form 1099-LTC), click the start or update button

[Oscar Zilch]

My software shows nothing like this and no way to enter LTC proceeds. Just 1099-G, etc. and does not ask for any info related to LTC.

[DoninGA]

@Oscar Zilch When you are in the Wage & Income section, did you scroll down to the bottom of the screen and locate the Less Common Section of the program?  If so, did you see Miscellaneous Income, 1099-A, 1099-C ?

[Oscar Zilch]

No. There is 1099-G, MISC, NEC, K, but nothing on LTC.

[DoninGA]

@Oscar Zilch You are in the wrong section.  You are in Other Common Income

Look for Less Common Income

[Oscar Zilch]

Found it! This takes me to Section C of Form 8853. As I read the instructions for Form 8853, I don't think this applies as my LTC benefits were NOT PER DIEM and my out of pocket expenses were simply reimbursed. Section C of Form 8853 applies only to PER DIEM benefits. So I don't think Form 8853 is required to be filed. Do you agree? Thanks for your help.