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Mom received LTC insurance pay for caring for my dad

Forum|Forum|5 years ago
February 10, 2021
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During COVID, my parents' LTC insurance company agreed to allow my mom to serve as the paid care provider for my dad, rather than hire a 3rd party. My mom provided her SSN and submitted weekly timesheets to the LTC company. All LTC company payments were payable to my dad as a "reimbursement" for the care provider's (my mom's) services. My dad did not issue a 1099 or W-2 to my mom. My dad received a 1099LTC from insurer but nothing with my mom's SSN. I think my mom needs to report this as taxable income as would any 3rd party they would have hired. Is this correct?

Best answer by MAK70

Yes, your mother would need to report the income for caring for her husband received from the LTC policy,

However, she would not owe self-employment tax on amounts she received from the insurance company if she is not engaged in a trade or business of providing care giving services. You would report as Miscellaneous Income.

M

MAK70Answer

Yes, your mother would need to report the income for caring for her husband received from the LTC policy,

However, she would not owe self-employment tax on amounts she received from the insurance company if she is not engaged in a trade or business of providing care giving services. You would report as Miscellaneous Income.