I HAVE A QUESTION ABOUT FORM 1099-LTC. WHERE DOES THE FIGURE FROM THIS FORM GO ON FORM 1040? THIS IS THE AMOUNT PAID BY INSURANCE COMPANY TO THE...

Section C - Long-Term Care (LTC) Insurance Contracts
Complete this section if the taxpayer or spouse received payments from a Long-Term Care (LTC) insurance contract as the policy holder. Otherwise, click Save to close this worksheet.

The Taxpayer Form 8853 worksheet should be used if the taxpayer is the policy holder, and the Spouse Form 8853 worksheet should be used if the spouse is the policy holder. The income must be reported by the policy holder even if the insured person is not a person who is part of this tax return.  

Policy Holder's Information

Enter the name and social security number of the taxpayer or spouse, who is the policy holder of this LTC insurance contract.

Line 14a

Insured Person
Enter the first and last name and social security number of the person who received payments under this policy as the insured person.

 Note: The insured person may be the policy holder, a person entered as the taxpayer or spouse, a person entered as a dependent or other cared for, or a third party who is not entered on the return at all.

Line 15

Other Persons Receiving Payments
Select "Yes" if another person, besides the insured, also received payments on a per diem or other periodic basis under a qualified LTC insurance contract or accelerated death benefits for the insured person. Otherwise, select "No".

If "Yes" has been selected and the only payments received were accelerated death benefits paid for a terminally ill person, complete Line 19 only.

If "Yes" has been selected because payments were received on behalf of more than one insured, see Multiple Payees under the IRS 2013 Instructions for Form 8853 for further directions.

Line 16

Terminally Ill Insured
Select "Yes" if the insured was terminally ill. Otherwise, select "No".

Checkbox
Check the box if "Yes" is selected above, and the only amounts received during the tax year were accelerated death benefits.

Line 17

Gross LTC Payments
Enter the total of all LTC payments received on a per diem or other period basis.

These amounts can be found in box 1 of Form 1099-LTC when the "per diem" box 3 is checked.

Line 18

Qualified LTC payments
Enter the portion of the amount entered on line 19 that was received from a qualified LTC contract.

 Caution: If the insured has more than one LTC period, the taxable amount of the payments received must be calculated separately during each LTC period. To do so, the return must be mailed with additional Forms 8853, by completing lines 18 through 26 on separate Sections C for each LTC period. Enter the total on line 26 from each separate Section C on the Form 8853 that the taxpayer attaches to the taxpayer's tax return. See the instructions for line 21 on this page for the LTC period.

Line 19

Accelerated Death Benefits
Enter the total accelerated death benefits received on behalf of the insured.

These amounts can be found in Box 2 of Form 1099-LTC.

Include only amounts the taxpayer received while the insured was a chronically ill individual.

Do not include amounts the taxpayer received while the insured was a terminally ill individual. If the insured's condition changed from chronically ill to terminally ill during the tax year, only include on line 19 payments received before the insured was certified as terminally ill.

Line 21

Number of days
Enter the number of days in the LTC period.

The taxpayer may choose from one of the two methods below unless there were multiple payees as explained above.

Method 1 - Contract Period
The taxpayer's LTC period is the same period as that used by the insurance company under the contract to compute the benefits paid to the taxpayer. For example, if the insurance company computes the taxpayer's benefits on a daily basis, the taxpayer's LTC period is 1 day.

 Caution: If the taxpayer chooses this method for defining the LTC period(s) and different LTC insurance contracts for the same insured use different contract periods, then all such LTC contracts must be treated as computing benefits on a daily basis.

Method 2 - Equal Payment Rate
The taxpayer's LTC period is the period during which the insurance company uses the same payment rate to compute the taxpayer's benefits.

 Example: The taxpayer has two LTC periods if the insurance contract computes payments at a rate of $175 per day from March 1, 2010 through May 31, 2010, and then at a rate of $195 per day from June 1, 2010 through December 31, 2010 . The first LTC period is 92 days (from March 1 through May 31) and the second LTC period is 214 days (from June 1 through December 31).

The taxpayer may choose this method even if the taxpayer has more than one qualified LTC insurance contract covering the same period.

 Example: The taxpayer has one insurance contract that pays $100 per day from March 1, 2011 through December 31, 2011, and the taxpayer has a second insurance contract that pays $1,500 per month from March 1, 2011 through December 31, 2011. The taxpayer has one LTC period because each payment rate does not vary during the LTC period of March 1 through December 31. However, the taxpayer has two LTC periods if the facts are the same except that the second insurance contract did not begin making payments until May 1,. The first LTC period is 61 days (from March 1 through April 30) and the second LTC period is 245 days (from May 1 through December 31).

Line 22

Qualified LTC Services
Enter the costs for qualified LTC services provided to the insured during the LTC period.

Qualified LTC Services 
These are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services required to treat a chronically ill individual under a plan of care prescribed by a licensed health care practitioner.

Line 24

Reimbursements for Qualified LTC Services
Enter the reimbursements the taxpayer received or expects to receive through insurance or otherwise for qualified LTC services provided for the insured for LTC periods during the tax year.

This information can be found in Box 3 of the Form 1099-LTC.

Do not include any reimbursements for qualified LTC services the taxpayer received under a contract issued before August 1, 1996. However, the taxpayer must include reimbursements if the contract was exchanged or modified after July 31, 1996 to increase per diem payments or reimbursements.