Guide to Tax Form 1099LTC
If the Internal Revenue Service (IRS), wants to know that you received long-term care or accelerated death benefits this tax year and you have received a 1099LTC form, then it is likely because they paid you these benefits. It’s important to know what the form means, even though these benefits are not always taxable. What is the 1099LTC form?
Forms 1099LTC are information returns that report payments from long-term-care insurance policies and accelerated-death benefits.
- Not every benefit listed on this form is taxable.
- What does a 1099LTC form mean?
What’s a 1099LTC form called by the IRS?
What’s a 1099LTC form for?
What This form is a sign that you received a payout, either from an insurance company or governmental agency. These payouts could be from a long-term care (LTC) insurance policy or, in some cases, early payments of a life insurance contract death benefit.
What are LTC benefits and accelerated death benefits?
Long-term care insurance benefits cover medical and personal care expenses for those who become chronically ill. Similarly, insurers may pay accelerated death benefits if you’ve been certified as terminally ill or chronically ill by a licensed healthcare practitioner.
The 1099-LTC form helps the IRS track payments related to long-term care expenses or terminal illnesses. The good news is that you may not have to worry about taxes on your total benefits (we’ll get into that a little later). The IRS will also receive a copy of Form 1099-LTC. The IRS will also receive a copy of the Form 1099. Reimbursed amount
These checked boxes inform the IRS if the benefit payout was made on the basis of actual costs incurred, or on a per-diem basis. This box might not be checked if you are terminally ill.
Box 4: Qualified contract:
This shows whether the benefits were from a qualified LTC insurance contract.
- Box 5: This box shows if the insured was certified as a chronically ill individual or a terminally ill individual and the date certified. This box might not be checked if you are terminally ill.
- Box 4: Qualified contract: This shows whether the benefits were from a qualified LTC insurance contract.
- Box 5: This box shows if the insured was certified as a chronically ill individual or a terminally ill individual and the date certified.
- Your 1099-LTC should also contain contact information for the payer, policyholder, or other details related to the payment. You might see:The payer’s name, address, and phone number
- The payer’s taxpayer identification number (TIN)Your name, contact info, and TIN (your TIN is often your Social Security number)
The account number of the policy
- Instructions for Form 1099-LTC
- So, what should you do with your Form 1099-LTC as a taxpayer? Here are some general instructions.
- 1. Determine if your payments were taxable.
- First, it’s important to remember that not all the amounts reported on Form 1099-LTC are automatically taxable. The following factors will determine whether or not you have to report the payment on your tax return:
Was it for long-term care services?
If you answered yes, then you may not have to pay taxes on the payment, especially if it was for qualified LTC and the payment did not exceed the actual cost of care. You can exclude from your income a certain amount each day for per diem benefits. In 2024, this daily tax-free limit will be $410. Was the payment for accelerated benefits?
Accelerated Death Benefits are usually excluded from taxable income when you received them due to being terminally or chronically sick.
2. Fill out Form 8853 if needed.
- You’ll need to file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, to claim an exclusion for accelerated death benefits made on a per diem basis. TaxAct(r), however, will guide you through the entire filing process and pull the appropriate tax forms for you. The amount of the payment and how you used it will determine whether you have to report them. TaxAct can help you determine if you owe taxes based on your answers. Is 1099-LTC income taxable? TaxAct makes it easy to report your LTC and accelerated death benefit payments. Our tax preparation software will ask detailed questions about your LTC payments and use your answers to report everything correctly.How to File Form 1099-LTC with TaxAct
- E-filing your 1099-LTC form with TaxAct is easy to do. Once you gather your documents, log into your TaxAct account and follow these steps:From within your TaxAct return (
Online
or Desktop), click
Federal.
(On smaller devices, click in the top left corner of your screen, then click
Federal
).
Click the
Other Adjustments
dropdown, then click
- Archer MSAs and Long-Term Care Insurance Contracts as shown below:3. Click Long Term Care Contracts and continue the interview to enter your information in Section C of Form 8853. Visit our Form 1099 Help Center for more information. Although some of the money on this form may be taxable income, it does not mean that you will have to pay more taxes. TaxAct can help you with your 1099-LTC and other tax filing documents. TaxAct will help you to understand your 1099-LTC, and all of your other tax filing documents.
