1099-LTC for reimbursed amounts

[dmj4]

I have a 1099-LTC that is "reimbursed amounts", checked in box 3. It does not have the "qualified contract" box checked. It was for actual reimbursements for nursing home. The expenses exceed the 1099-LTC reimbursed amount.

I believe it is NOT taxable, but do I show it anywhere on the tax return? It goes against my grain to just ignore a 1099 of any kind, but if that is correct then I will. I have looked at the 8853 and I don't see a line to put "reimbursed amounts" on.

The flow chart in the instructions for 8853, asks if "received per diem payments or other periodic payments" with an answer of NO, it then asks if "received accelerated death benefits" with an answer of NO, it shows "do not fill out Section C".

I do understand that medical deductions must be reduced by the medical expenses paid by the LTC.

Does it go anywhere on the return?

[Bees Knees]

I got one of these this year. I put it on line 21 of the 1040 with the amount and the 1099 ID number. Then next to it, I zeroed out the amount with the explanation that it was a non-taxable distribution from a long-term care insurance contract.

[dmj4]

Years Ago....

I got one of these this year. I put it on line 21 of the 1040 with the amount and the 1099 ID number. Then next to it, I zeroed out the amount with the explanation that it was a non-taxable distribution from a long-term care insurance contract.

I did this same thing years ago, but I wasn't sure if still allowed based on the seemingly recent rejects on line 21 wording.
Thanks so much for for responding.

[FEDUKE404]

Entering LTC expenses

It's been several years since I had to put up with one of these situations, but IIRC the trick was first to make it to the second page of Form 8853.

Once there, your software should have sufficient Q&A's to guide you to the proper conclusion.

Line 24 specifically asks "Reimbursements for qualified LTC services provided for the insured..."

Unless the care is extremely inexpensive or the LTC payments are extremely generous, the (potentially) taxable amount should come out to zero.

FE

[ttbtaxes]

I still really confused with the 1099-LTC when the reimbursed box is checked. For what I can gather, Form 8853 doesn't apply. It would seem to me that the medical expenses would be entered on Schedule A and then reduced by the amount of the reimbursement.

The problem comes when the client does NOT itemize. If no Form 8853 accompanies the return, as I think it shouldn't, will the IRS generate a notice?

Any thoughts?

[FEDUKE404]

Dealing with Form 8853

I still really confused with the 1099-LTC when the reimbursed box is checked. For what I can gather, Form 8853 doesn't apply. It would seem to me that the medical expenses would be entered on Schedule A and then reduced by the amount of the reimbursement.

The problem comes when the client does NOT itemize. If no Form 8853 accompanies the return, as I think it shouldn't, will the IRS generate a notice?

Any thoughts?

I think what I said ~one year ago still applies. "It's been a while. . ."

So far as I recall, you still need to work your way through Page 2 of Form 8853 to calculate whether you would have any *taxable* LTC payments that would eventually go to line 21 of Form 1040. Instructions I saw re the form and LTC payments states something along the line of "LTC benefits that may be excluded from income."

My software actually shows, on the worksheet for line 21, an entry "Long-term Care Distribution, Form 8853."

You also have to pay careful attention to whose Soc Sec number appears on the Form 1099-LTC.

Otherwise, you are correct that the main focus is to reduce otherwise allowable Schedule A medical expenses by related LTC payments.

Hope this helps.

FE

[ttbtaxes]

Schedule C (page 2) of the Form 8853 only applies to per-diem reimbursements. If they were reimbursed expenses, and the box is checked on the 1099-LTC, page 2 of the 8853 is left blank. There is a flowchart on page 6 of the 8853 IRS instructions that confirms this:

http://www.irs.gov/pub/irs-pdf/i8853.pdf

[FEDUKE404]

Page 2 revisited

Schedule C (page 2) of the Form 8853 only applies to per-diem reimbursements. If they were reimbursed expenses, and the box is checked on the 1099-LTC, page 2 of the 8853 is left blank. There is a flowchart on page 6 of the 8853 IRS instructions that confirms this:

http://www.irs.gov/pub/irs-pdf/i8853.pdf

I guess that's why IRS makes available the rules for Form 8853 for those who need it.

As I stated earlier, I haven't encountered a Form 1099-LTC in nearly a decade.

I did just take a quick look at Section C of Form 8853, and regardless of "the flow chart" I still would likely run the numbers through the form to convince myself there was NO taxable income rattling around as a result of a number eventually appearing on line 26.

Just trying to be helpful.

FE

[ttbtaxes]

You are being helpful and I appreciate it. It's the confounded forms and rules that have me twisted into a tax pretzel.

[Gretel]

Warning - old post on 1099-LTC

Sorry, for bringing up this old post. From what I gather, reimbursed amounts are NOT considered periodic payments, even though they are made monthly to reimburse for monthly nursing home care?