Should I deduct 1099-LTC benefit payments as "medical expense reimbursements?"

[marcytom4]

My mother is chronically ill and in a nursing home.  She receives per diem payments under her Long Term Care policy and I receive a 1099-LTC for these payments.  I entered the total 1099-LTC  amount in the Misc. Income in the designated section.  The nursing home charges are greater than the LTC benefits.  Should I list 1099-LTC payments total in the "medical reimbursements received" section as well? 

[MarilynG · Accepted solution]

No, don't enter the amount of your 1099-LTC as a Reimbursement in the Medical Expenses section.

In the LTC section, under Miscellaneous Income, enter the amount of your 1099-LTC distribution and the amount that was used for payment of long-term care expenses (Qualified LTC Benefits). 

If expenses are greater than the distribution, enter the excess expenses as Medical Expenses in the Deductions & Credits section. 

You don't need to enter anything about the 1099-LTC (or related expenses) in the Medical Expenses section.

Click this link for more info about LTC-1099 Benefits.

[Edited 03/24/2020 | 12:16 PM]

[lglhmi]

I get a per perdeum on my LTC policy.  The pay the care providers and send me the remaining of the perdeum.

I will place the care costs as expences but where do I put the remaining money?

[AmyC]

Generally, payments received under a long-term care insurance contract are excluded from income. For the per diem payments, the exclusion amount is limited. Taxable amounts are reported on Form 8853,

Any amount paid in excess of the per diem limit is taxable. The per diem limit for 2020 is $380. For 2019, the amount is $370.

You do not need to put the expenses anywhere in your case. You simply claim the excess income.

Example:

LTC pays you for 100 days of LTC at $500/day for $5,000.

The limit is $370/ day or $3,700 total

This leaves $5,000 - $3,700 = $1,300 as taxable income.

Only report the income, not the expenses.

@lglhmi

[lglhmi]

Thanks, do I put the long term care costs as part of my medical expenses?

[DawnC]

Yes, when you go through the medical expenses section under Deductions and Credits, there will be place to enter LTC premiums and fees.   However, only include those costs that were not reimbursed to you.  Only enter expenses and costs for which you paid for and did not receive any payments for.  

Long-term care fees include:

• Qualified long-term care contracts
• Special education for mentally or physically disabled persons
• Wages for nursing services    

@lglhmi

[srtkd]

Where do I put the benefits received from 1099 lct?  My wife is 24/7 in a nursing home.

[JamesG1]

Do not enter long term care benefit payments as medical expense reimbursements.

The 1099-LTC form is entered in the Wages & Income/Income & Expenses section where you will be asked about the reimbursements as well as the costs/expenses.

As you work through the TurboTax interview, you will be asked for the amount from the 1099-LTC as well as actual costs/expenses. If costs/expenses are equal or greater than the reimbursed amount, none is taxable.

Follow these steps to enter form 1099-LTC.

• Down the left side of the screen, click Federal.
• In the center of the screen, click Income & expenses.
• On the screen Your income and expenses, scroll all the way down to the last section, Less Common Income.
• Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
• On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the topic, Long term care account distributions (Form 1099-LTC).

See this help.