The IRS form 1099-C is given by an insurance company or viatical settlement provider for imbursements made under a long-term care insurance contract or for accelerated death benefits. The long-term care insurance contract is given to a person who has been officially certified as chronically ill by a licensed medical practitioner. This means that the insurance company or viatical settlement provider pays for the accelerated death benefits of the chronically ill individual as certified by the licensed health care practitioner. The amounts received from under from a long-term care insurance are normally excluded from the individual’s income. If payments are given on a Per Diem basis, there may be a limited exclusion from the amount. Payments made for the accelerated death benefits are completely excluded from the individual’s income assuming that he has been certified as terminally ill by a licensed physician. For chronically ill individuals, the accelerated death benefits paid are excluded to the same degree as they were paid on a long-term care insurance contract. Here’s how to fill out an IRS form 1099-LTC:
- You may order your official IRS forms from the IRS online ordering website or from 1-800-TAX-Form. Make sure to get your forms from these official providers, as anything else will be unacceptable.
- Place a check mark on either of the two boxes above indicating, “VOID” or “CORRECTED.” Fill in payer’s name, street address, city, state, ZIP code, and telephone number. Below this area, fill in the payer’s federal identification number and beside it. Place the policyholder’s identification number. Right below, fill in the personal information of the policy holder. Place the name of the policy holder, the street address and apartment number, the city, state, and ZIP code. The account number below indicates the number assigned to the holder by the payer to distinguish his particular account.
- Proceed to fill out the boxes on the right side of the form. On box number 1, indicate the gross benefits under the long term care insurance, which were paid during the year. Box number 2 should be filled with the gross accelerated death benefits that were paid for during the year. Box number 3 will contain information regarding as to how the amount on box numbers 2 and 3 were paid for, whether on a per diem basis or reimbursement of actual expenses on long-term care. For terminally ill patients, box number 3 need not be filled. Box 4 will indicate if benefits were from a qualified long-term insurance contract or LTC. In box 5, fill in whether chronically or terminally ill. Fill in the latest certified date.
- File the form to the IRS and send copies to recipients. Visit the official website of the IRS for schedule of filing as changes occur yearly.
As with any official forms, it is always best to be meticulous when
completing the form 1099-LTC. This form will benefit you greatly and
save you a lot of problems later on. Should questions arise when filling
out the form, consult with a professional to give advice as to how it
can be done as properly as possible.