LTC insurance reimb.

[LisaVee]

What should I do if Long term care costs paid in 2019.  Were reimbursed by the LTC Insurance Company in the January of 2020?

I feel these reimbursements should be recognized on the 2019 tax return, so they off set the payments made by my Mother-in-Law to her LTC facility in 2019.  Am I thinking correctly?  If I don't use them to offset her 2019 payments made, she will end up being taxed on money she should not be taxed on.

Thanks.

[JotikaT2]

It depends.

If you deducted the costs on your 2019 tax return return, you will need to report the reimbursements in your 2020 tax return under Less Common Income as Miscellaneous Income.  

If you did not take a deduction in 2019, you do not need to report the reimbursement in 2020 as you never took the tax deduction.  Therefore, it would simply be a reimbursement of an expense and not taxable income.

When is long term care reimbursement considered income

[LisaVee]

Thanks you so much for your help.  You have confirmed what I was thinking.

[DawnC]

You are welcome; feel free to comment here if you have any further questions and/or start a new thread here.