A question we often get is whether or not long term care insurance is taxable. The truth is most long term care insurance benefits are not considered taxable income by the IRS. This is because they are treated similarly to reimbursements for medical expenses, which the IRS does not consider taxable. When you receive benefits, the insurance company will send you a 1099 LTC tax form showing that they paid it. People often believe they owe taxes because they receive this form. However, the 1099 LTC form helps with IRS record keeping. It doesn’t mean you owe income tax on long term care when your insurance company pays your bills directly or reimburses you, you don’t need to do anything else. The money simply comes out of your policies payout. Now, this is good news for those who receive long term care benefits because it means you don’t have to worry about filing any additional tax forms. The benefits you receive can be used to cover costs like in home care, assisted living or nursing home expenses. And there may be exceptions to this depending on the type of policy you have. So it is always important to speak to a trusted insurance agent to get the most accurate information.

We’d be happy to review your insurance coverage options with you! Give us a call at 440-729-4042 or visit https://luczkowskiagency.com.