Do I have to report long term care benefits received if they are reimbursements of expenses paid (i.e., not per diem)?

[marissashu]

I received a 1099-LTC form with "reimbursement amount" box checked. My actual expenses were greater than the benefits received.

[RayW7]

 If costs/expenses are equal or greater than the reimbursed amount, none is taxable. 

As you work through the TurboTax interview, you will be asked for the amount from the 1099-LTC as well as actual costs/expenses.  The 1099-LTC form is entered in the Wages and Income section. Follow these steps:

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

• Select Federal Taxes (top of program)
• Select the Wages & Income (sub-tab)
• If shown, select "Skip to all income" in order to see all income options
• Scroll down to Less Common Income
• Select Miscellaneous Income, 1099-A, 1099-C
• Select Long-term account distributions (Form 1099-LTC)  (click on first screenshot below for more detail)

As you work through the TurboTax interview, you will come to page that will ask about your costs as well as your reimbursements 

Click this link for more info on When is LTC Considered Taxable. 

[blb6117]

I followed the instructions and the screen says the LTC are not taxable however they did increase the total income and appears they are taxed.  In fact, on the Wages and Income choices screen under miscellaneous income it shows 0 but again it is showing as increasing the total income.  What is wrong?

[AnnetteB6]

If TurboTax indicated that the long-term care benefits are not taxable, then they are not being included as taxable income on your return.  

Taxable income and total income are not necessarily the same thing, especially if you are looking at some of the summary screens within TurboTax and not your actual Form 1040.  The amount may be included as part of your total income, but not part of your taxable income.

If the long-term care benefits are being included as part of your taxable income, they will be shown on Form 1040 Schedule 1 line 8z.

@blb6117

[blb6117]

Thank you for that response, however:  One of the reasons why I say it is showing as taxable income is because once I entered the box 1 of  gross LTC benefits paid the total tax due for both federal and state went up in the program.  The LTC benefit is $170 a day so from other reading it doesnt appear it should be taxable.  

[blb6117]

Schedule 1 line 8Z does show that they are taxable.  did I input something wrong?

[AnnetteB6]

As long as the qualified long-term care costs are at least as much as the long-term care benefits received, then the benefits are not taxable.

Go back through that section to be sure that you have entered not only the benefits reported on the 1099-LTC but also the amounts spent for qualified long-term care.  

@blb6117