Is a payment I received from Genworth Long Term Care taxable? I chose a reduced future long term care benefit in exchange for a lesser annual premium and a cash payment

Forum|Forum|2 years ago
March 2, 2024
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Best answer by DavidD66

It sounds like what you received was return of premium for making changes to your policy. If that is the case, it would not be taxable. They simply refunded some of the premiums you paid. If the payment was a potentially taxable benefit, paid out from a Long Term Care policy claim it would have been reported on a Form 1099-LTC. If you want to be sure, you should contact Genworth or the agent that sold the policy to you.

DavidD66Answer

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gabednar1962

Employee

Thank you, DavidD66. would the answer you provided be changed if it was the result of a class-action lawsuit? As a result of the $6,000 received, I have lesser benefits AND future premiums were reset/reduced.

with thanks, a long time TurboTax user.

george

DavidD66

@gabednar1962

Yes, my answer would change. For a Class-Action law suit the answer is - It depends on what the settlement was for. If the settlement was payment of punitive damages, then the proceeds are taxable. If it was payment of covered benefits previously denied, it would not be taxable if it is a qualified LTC plan. If it represented a return of premiums (as in the original question) it would not be taxable. Again, it depends on what the $6,000 payment was for.

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