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Level 2
posted Apr 1, 2024 11:31:35 AM

Help Understanding 1099-R for Long-Term Care Insurance (WA State)

Hello! My wife and I live in Washington state. We have a third-party long-term care (LTC) insurance policy to qualify for an exemption from the WA LTC tax. However, my spouse recently received a 1099-R form showing a gross distribution, even though we haven't withdrawn or used the LTC funds directly.

 

Here are my questions:

  1. Do we need to include this 1099-R information on our 2023 tax return (using TurboTax)?
  2. Why is there a gross distribution reported when we haven't used the money?
  3. Could this gross distribution impact our taxes?

0 1 2129
1 Replies
Expert Alumni
Apr 9, 2024 11:08:31 AM

Benefits paid under a long-term care insurance plan would normally be reported on Form 1099-LTC and are often nontaxable.

 

Were any funds withdrawn through the plan? You stated the funds weren't withdrawn or used "directly". 

 

You could receive a Form 1099-R if your policy included an annuity or life insurance contract.

 

Contact the payer for an explanation.

 

See this TurboTax tips article for more information.