Reporting Requirements

<div class="Section1">Long-term care insurance companies paying long-term care benefits must file a return that sets forth:</div><br /> <div class="Section1"><br /> <blockquote>(1)     the aggregate amount of long-term care benefits paid to any individual during a calendar year;<br /> <br /> (2)     whether or not benefits are paid, either fully or partially, on a per diem or other periodic basis without regard to expenses incurred during the period;<br /> <br /> (3)     the name, address, and taxpayer identification number (“TIN”) of the individual; and<br /> <br /> (4)     the name, address, and TIN of the chronically ill or terminally ill individual for whom the benefits are paid.<a href="#_ftn1" name="_ftnref1">¹</a></blockquote><br /> In addition, any company required to file a return must provide a written statement to each individual whose name is reported under the above requirement. That statement must include the name, address, and phone number of the information contact of the company making the payments, and the aggregate amount of long-term care benefits paid to the individual shown on the above-mentioned return. This written statement must reach the individual on or before January 31 of the year following the calendar year for which the return was required.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> The IRS has prescribed Form 1099-LTC<a href="#_ftn3" name="_ftnref3">³</a> to meet both filing requirements.<br /> <br /> <hr /><br /> <br /> <strong>Planning Point:</strong> Policyholders of both tax-qualified (TQ) <em>and</em> non-tax-qualified (NTQ) long-term care policies receive a 1099-LTC from their respective insurance companies as a result of claims paid. Although the form advises that amounts paid under TQ long-term care insurance are generally tax-free, it is silent on NTQ plans. Furthermore, those who complete Form 1099-LTC are not required to check the box identifying the tax status of the underlying coverage—it is optional.<br /> <br /> <hr /><br /> <br /> For purposes of these reporting requirements, a long-term care benefit is any payment under a product that is advertised, marketed, or offered as long-term care insurance and any payment that is excludable from gross income as an accelerated death benefit under IRC Section 101(g).<a href="#_ftn4" name="_ftnref4">⁴</a><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.     IRC § 6050Q(a).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.     IRC § 6050Q(b).<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.     http://www.irs.gov/pub/irs-pdf/i1099ltc.pdf (last accessed March,13, 2024).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.     IRC § 6050Q(c).<br /> <br /> </div>