Documents payments received for qualified long-term care services or terminal illness benefits.

Key Components:

• Box 1: Gross long-term care benefits paid
• Box 2: Accelerated death benefits (if applicable)
• Box 3: Per diem payments (daily benefit amounts)
• Box 4: Qualified contract indicator
• Box 5: Chronically ill certification date

• Individuals receiving long-term care insurance benefits
• Terminally ill patients taking accelerated death benefits
• Policyholders using per diem contracts for chronic illness
• Beneficiaries of life insurance with LTC riders
• Those receiving hybrid policy benefits (life insurance + LTC)

• Tax-free benefits: Payments for actual qualified LTC services
• Potentially taxable: Per diem amounts exceeding daily limits ($420/day in 2024)
• Accelerated death benefits: Generally tax-free if terminally ill
• Non-qualified contracts: Benefits may be fully taxable
• Premium reimbursements: May reduce deductible premiums

Filing requirements:

• Taxable amounts reported on Form 1040 Line 8b (Other Income)
• Excludable benefits don't need reporting
• Keep detailed records of actual expenses incurred
• Compare per diem payments to IRS daily limits
• Maintain physician certification of chronic illness

• Understand the difference between reimbursement and indemnity policies
• Track total premiums paid over the life of the policy
• Know the 2024 per diem limit ($420/day)
• Coordinate with medical expense deductions
• Special rules apply for business-owned policies
• State tax treatment may differ from federal

• Form 1040 (U.S. Individual Tax Return)
• Publication 502 (Medical and Dental Expenses)
• Publication 525 (Taxable and Nontaxable Income)
• Form 8853 (Archer MSAs and Long-Term Care Insurance)
• State-specific LTC insurance forms