1099-LTC

[lnxTopeka]

My mom received a 1099-LTC with an amount in box one only and per diem checked.  The company pays a flat rate for each day of care during a month, no matter the cost of care we pay to Home Instead.  I have no idea what I am supposed to put in LTC No. of Days for Costs of Qualified LTC Services.  We started making payments to Home Instead in June 2020 and her benefits did not begin until she met the 90 day elimination period in September.  In October they issued a payment that included paying us back the premiums paid those months as well as 2 weeks of respite care towards the care my dad was giving her.  Thanks.

[MarilynG1]

Click this link for more info on How to Enter 1099-LTC.

Any expenses you incurred over the amount of the 1099-LTC will be transferred to Medical Expenses which can be used if you file with Itemized Deductions. 

[lnxTopeka]

I already read every post about this form I can find.  This policy was a primo one no longer sold.  They send out $216 per day even though the cost may be $78.  I do not know what to enter for LTC number of days.  Is that the total days they paid mom something in 2020 (ended up being 90)?  Is the costs just for the corresponding months or can I input the amounts NOT covered during the 90 day waiting period?

[gloriah5200]

You must enter the 1099-LTC into the return.  Since it was paid in per diem, the amount of care received will need to be compared to the amount paid to determine any taxable portion.

You can include in medical expenses amounts paid for qualified long-term care services and certain amounts of premiums paid for qualified long-term care insurance contracts.

The amount of qualified long-term care premiums you can include is limited. You can include the following as medical expenses on Schedule A (Form 1040).

1. Qualified long-term care premiums up to the following amounts.

   1. Age 40 or under—$430.

   2. Age 41 to 50—$810.

   3. Age 51 to 60—$1,630.

   4. Age 61 to 70—$4,350.

   5. Age 71 or over—$5,430.

The limit on premiums is for each person.

For additional information, refer to the following:

taxation of long term care premiums per diem

Form 8853 Part C must be completed in the return to report long term care insurance payments based on per diem:

• Recipient was a policyholder who received payments under an LTC insurance contract or received any accelerated death benefits from a life insurance policy on a per diem or other periodic basis in 2020. 

In general, amounts paid under a qualified LTC insurance contract are excluded from your income. However, if you receive Per Diem Payments (defined next), the amount you can exclude is limited.

Special rules apply in determining the taxable payments if other individuals received per diem payments under a qualified LTC insurance contract or as accelerated death benefits with respect to the insured listed on line 14a

If you have more than one LTC period, you must separately calculate the taxable amount of the payments received during each LTC period. To do this, complete lines 18 through 26 on separate Sections C for each LTC period. Enter the total on line 26 from each separate Section C on the Form 8853 that you attach to your tax return. See the instructions for line 21 for the LTC period.

For additional information of line-by-line instructions for completing Form 8853, please see the following:

Instructions for Form 8853 Part C is for LTC pmts