Taxable amounts of an overpayment from long term disability

[goberthaler]

IRS publication 525 repayment

[DMarkM1 · Accepted solution]

Someone may be able to help with this issue if you would post to clarify what your specific question or concern is for taxable amounts of long term care payments.  From IRS Publication 525, 

"In most cases, long-term care insurance contracts are treated as accident and health insurance contracts. Amounts you receive from them (other than policyholder dividends or premium refunds) are excludable in most cases from income as amounts received for personal injury or sickness. To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return." 

[goberthaler]

when I print out my taxes, will the tubotax program provide a FORM 8853 for my overpayment I summited?

[AmyC]

The form 8853 is part of the tax return and is usually used for entering income received from Long Term Care Insurance, 1099-LTC.

If you are saying that you had to pay back money, that is a completely different issue and the amounts would matter in if it can be reported and how. If you repaid more than $3,000,  you are able to use the methods on page 35. About Publication 525, Taxable and Nontaxable Income.

Your statement "Taxable amount of overpayment" is just not clear what happened and what you need.

[Kelley1967]

I have that question also. I was approved for SSDI is 2019. I have been off work since Aug 2017 and approved for SSDI in May of 2019.  I have filed both my 2018 and 2019 tax returns. After I got approved, my Social Security sent me a huge check, but was immediately withdrawn from my bank account by my LTD insurance company. I did not touch any of that. I recently received a 1099 form from Social Security stating that my Net Benefits for 2020 is $63,062. Down at the bottom it shows that this amount includes $22,968 paid in 2020 for 2019 and $16,758 paid in 2020 for 2018. I didn't get any of this money in 2020. I am not sure if they are referring to my lump sum back payment I received in May of 2019. 

I also received a letter from my LTD insurance company saying that I may have the opportunity for an income tax offset. 

I don't know how I would even pay something like this, plus I don’t think I should have too since I never laid my hands on it. 

I also should note that I did read IRS notification 525 and can’t find anything related to this.

Thank you.