Do I Need to Report 1099-LTC on My Tax Return?

If you received Form 1099-LTC, you generally do need to report it on your federal tax return by filing Form 8853, even though most long-term care benefits end up being fully excluded from your taxable income. Reporting a 1099-LTC on your tax return is a documentation step: the IRS wants to see the calculation that shows why the benefits are not taxable, and in the majority of cases the taxable amount comes out to zero. Whether any of the money actually gets taxed depends on the type of policy, how it pays benefits, and whether the daily payout exceeds the federal per diem limit of $430 for 2026.¹

What You Have to File

File Form 8853 with your Form 1040 for the year the benefits were paid. This is required even if none of the benefits are taxable. The IRS uses the form to see the math behind the exclusion.²

Section C of Form 8853, lines 18 through 26, is where long-term care benefits get worked through.³ If line 26 comes out at zero, that’s the end of it: file the 8853 and nothing else needs to appear on your return. If line 26 shows a positive number, that amount is taxable and gets carried to Schedule 1 of Form 1040 as other income.

If care spanned separate periods during the year, run Section C separately for each period on separate copies, then combine the results on the single Form 8853 you actually file.⁴

Whether Any of It Is Taxable

Two things on the 1099-LTC drive the answer: whether Box 4 shows a qualified contract, and whether Box 3 shows “Per Diem” or “Reimbursed Amount.”

Qualified Contracts

A qualified long-term care insurance contract is treated like accident and health insurance, so its benefits are generally excluded from gross income.⁵ Box 4 on the 1099-LTC should be checked if your policy qualifies. That box is optional for the insurer to complete, so a blank Box 4 is not proof one way or the other; call the insurance company to confirm the contract’s status.⁶

Non-qualified contracts may still allow some or all of the benefit to be excluded under general accident and health insurance rules, but the analysis gets complicated and depends on your specific policy language. If Box 4 isn’t checked and the insurer confirms the contract isn’t qualified, this is a good moment to bring in a tax professional rather than guess.

Reimbursement Policies

If Box 3 says “Reimbursed Amount,” the policy only pays for care expenses you actually incurred. Those payments are excluded from income, and the per diem cap has nothing to do with the calculation because the benefits cannot exceed your real costs by design.⁷ File Form 8853, but expect a zero result.

Per Diem Policies and the $430 Limit

If Box 3 says “Per Diem,” the policy pays a fixed daily amount regardless of what care actually cost. Those payments are excluded only up to the federal per diem exclusion, which is $430 per day for 2026.¹

The calculation on Form 8853 lets you use the greater of two figures: the per diem exclusion ($430 times the number of care days) or your actual qualified long-term care expenses. From that figure, subtract any reimbursements you got from other insurance. If the Box 1 total exceeds the resulting number, the excess is taxable.²

In practice, nursing home and assisted living costs often run well above $430 per day. When actual expenses exceed the daily benefit the policy paid, the taxable amount on line 26 comes out to zero even if the daily benefit was above the IRS limit. Keeping records of what care actually cost is what makes that offset available, so hold onto invoices and receipts alongside the 1099-LTC.

Situations That Change the Answer

Accelerated Death Benefits (Box 2)

Accelerated death benefits from a life insurance policy appear in Box 2. If the insured person is terminally ill (certified by a physician as expected to die within 24 months),⁸ the full amount is excluded from income.⁹

If the insured is chronically rather than terminally ill, the exclusion is narrower. The benefits are excludable only to the extent they pay for actual qualified long-term care services not covered by other insurance, or fall within the per diem limit.⁹ That means the same Form 8853 calculation applies as with a per diem LTC policy.

More Than One Policyholder on the Same Insured

The $430 daily exclusion is per insured person, not per policy. If two or more people hold qualified LTC contracts on the same insured individual, they must share that single daily exclusion.⁴

The insured gets the exclusion first, up to what the insured personally received. If the insured files jointly with a spouse who is also a policyholder, the couple shares the exclusion first. Anything left over is divided among other policyholders in proportion to what each received.⁴ If you own a policy on someone else and don’t coordinate with the other policyholders, you can end up with an unexpected taxable amount on your own return.

If You Also Deduct Medical Expenses

You cannot deduct long-term care expenses that your insurance already reimbursed tax-free. If you itemize on Schedule A, subtract tax-free LTC reimbursements from the medical costs you claim.¹⁰ For instance, on $80,000 of qualified care costs with $65,000 reimbursed tax-free, only the remaining $15,000 can go into your itemized medical expenses, still subject to the AGI threshold. This is easy to miss when the benefit checks were large.

If the Form Is Missing or Wrong

Insurers are required to send Form 1099-LTC by January 31 following the tax year.¹¹ If you don’t have yours by mid-February, ask the insurance company for a copy. If that doesn’t produce a form by the end of February, call the IRS at 800-829-1040 and they’ll contact the payer.¹²

If Box 1 or Box 2 doesn’t match your records, request a corrected form from the insurer rather than filing with numbers you know are wrong. If the corrected form won’t arrive before the filing deadline, use your own records to estimate the correct amounts. If a corrected form later shows different figures, file Form 1040-X to amend the return.¹²

1
Internal Revenue Service. Rev. Proc. 2025-32
2
Internal Revenue Service. Publication 525, Taxable and Nontaxable Income
3
Internal Revenue Service. Instructions for Form 8853 (2025)
4
Internal Revenue Service. Instructions for Form 8853 (2025)
5
Office of the Law Revision Counsel. 26 U.S. Code 7702B – Treatment of Qualified Long-Term Care Insurance
6
Internal Revenue Service. Instructions for Form 1099-LTC (Rev. April 2025)
7
Internal Revenue Service. Form 1099-LTC (Rev. April 2025) – Instructions for Policyholder
8
Internal Revenue Service. Instructions for Form 1099-LTC
9
Office of the Law Revision Counsel. 26 U.S. Code 101 – Certain Death Benefits
10
Internal Revenue Service. Publication 502, Medical and Dental Expenses
11
Internal Revenue Service. Publication 1099, General Instructions for Certain Information Returns (2026)
12
Internal Revenue Service. What to Do When a W-2 or Form 1099 Is Missing or Incorrect