Question

What part of my long term care benefits are taxable? i am getting $50 a day per diem

Forum|Forum|5 years ago
February 23, 2021
1 reply
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turbotax is calculating the total benefits paid $13100 as taxable. i am getting only $50/day per diem

TurboTax Self Employed Online

Long term care benefits would only become taxable income to you if the amount received exceeded the amount paid for the long-term care. You should enter the Form 1099-LTC to reconcile the fact that it is not taxable income.

Be sure to continue through the whole section of TurboTax where the Form 1099-LTC information is entered. Some of the questions will ask you to enter the amounts paid for qualified long term care services. If the amount paid exceeds your benefits distribution, then none of it will be taxable income.

See the following TurboTax article for more information: Where do I enter Form 1099-LTC?

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C

connie09Author

NO, this is NOT the answer. Turbotax defines qualified long term care benefits as those provided by a 'licensed' health care practitioner for a 'chronically' ill individual. Neither of those are correct! licensed professional do NOT provide personal care services which are the services provided by NON licensed persons to assist affected clients in activities of daily living. this could be for a SHORT term as in an extended rehab period after surgery OR it could be for a chronically ill individual such as one who was affected by a stroke. When Turbotax asks how much the taxpayer paid for Qualified services....by Turbotax' erroneous definition...the answer will be 0 thus making all the benefits paid taxable. Medicare pays for licensed professional care, but not personal care. THAT's why people buy long term care insurance...for per diem coverage to assist with payment for personal care. Whoever wrote the Turbotax criteria is NOT familiar with Medicare and long term care regulations and terms. Turbotax needs to change that definition of qualified care and delete that statement that it has to be care from a licensed professional. Also definition needs to be changed from being chronically or terminally ill. Neither is required for long term care benefits.