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Do I have to report my Form 1099-LTC income?

Yes. Long-term care insurance can be taxable. It's reported on Form 1099-LTC. You must report this income on Form 8853 to see if any of it is taxable. If so, you'll report the taxable part as other income.

The payments are fully taxable if the long-term care insurance payments weren't both of these:

  • For qualified long-term care services
  • For a chronically ill person

Qualified long-term care services must be:

  • Necessary and required by a chronically ill person
  • Provided from a care plan prescribed by a licensed health care practitioner
  • For any of these types of services:
    • Diagnostic
    • Preventive
    • Therapeutic
    • Treatment
    • Mitigating
    • Curing
    • Rehabilitative

A chronically ill person is someone who has been certified by a licensed health care practitioner within the last 12 months as one of these:

  • An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. Activities of daily living:
    • Eating
    • Toileting
    • Transferring
    • Bathing
    • Dressing and continence
  • An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment

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