Form 1099-LTC Instructions

What is IRS Form 1099-LTC?

Form 1099-LTC, "Long-Term Care and Accelerated Death Benefits" is used by insurance companies, government entities, and other payers to report payments made to policyholders during the previous tax year. These payments generally fall into two categories:

• Long-Term Care (LTC) Benefits: Reimbursements or direct payments made to cover qualified long-term care expenses, such as nursing home stays, assisted living facilities, or home healthcare services.
• Accelerated Death Benefits (ADBs):Portions of a life insurance policy's death benefit paid to the policyholder while they are still alive, often due to a terminal illness diagnosis.

The information reported on Form 1099-LTC helps the IRS determine if any portion of these benefits is taxable for the recipient.

Who receives a copy of Form 1099-LTC?

A copy of Form 1099-LTC must be sent to both the IRS and the policyholder or the individual receiving the benefits. This ensures that the IRS is informed of the payments made under a long-term care insurance contract or for accelerated death benefits.

It also provides the recipient with the necessary information to report these benefits on their tax return. Accurate reporting helps both parties comply with tax regulations and avoid potential issues with the IRS.

When is the Form 1099-LTC due date?

Payers must be aware of two important deadlines related to Form 1099-LTC:

Filing deadline with the IRS

The deadline for payers to submit Form 1099-LTC to the IRS depends on the filing method:

• Electronic filing deadline: March 31, 2025
  If you are e-filing Form 1099-LTC with the IRS, the deadline is March 31st of the year following the tax year for which the form is being issued.
  If the deadline falls on a federal holiday or weekend, the form is due on the next business day.

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• Paper filing deadline: February 28, 2025
  If you are filing Form 1099-LTC with the IRS using traditional paper methods, the deadline is February 28th of the year following the tax year for which the form is issued.

Recipient copies deadline: January 31, 2025

Payers must provide recipients with copies of Form 1099-LTC by January 31st of the year following the tax year for which the form is issued. This ensures recipients have the necessary information to accurately file their tax returns on time.

Failure to meet these deadlines or providing inaccurate information on Form 1099-LTC may result in IRS penalties. Payers should take appropriate measures to ensure the timely and accurate filing and distribution of Form 1099-LTC to avoid potential penalties.

Form 1099-LTC penalty

If you miss filing Form 1099-LTC within the deadline, the IRS will impose a penalty. Here are the Form 1099-LTC penalty rates:

Form 1099-LTC Instructions - How to fill out?

Let's see line-by-line instructions on how to fill out Form 1099-LTC.

Payer details

Enter the business name, complete address, and TIN (SSN if you're an individual; EIN if you're a business)

Policyholder details

Definition: The policyholder is the owner of the insurance contract. This includes:

• Individual owners
• Owners who have sold or assigned the contract to a viatical settlement provider
• In group contracts, the certificate holder or similar participant

Report long-term care benefits to the policyholder, even if payments were made to:

• The insured person
• A third party (e.g., nursing home, caretaker, or physician)

Enter the policyholder’s name, complete address, and TIN (SSN for an individual; EIN for a business).

Account number

You must provide the account number in this situation:

• You have multiple accounts for the same recipient, and you are filing more than one Form 1099-LTC for that recipient.

Insured

Definition: The insured is the person who is chronically or terminally ill and for whom the long-term care benefits are paid.

Enter the insured’s name, complete address, and TIN (SSN of the individual).

Important: The policyholder and the insured may be the same person in some cases.

Box 1: Gross Long-Term Care Benefits Paid

Enter the total amount of long-term care benefits paid this year, excluding accelerated death benefits. Include:

1. All payments made on a per diem basis
2. All payments made on any other periodic basis
3. All reimbursements

These payments may have been made to:

• The insured person
• The policyholder
• Third parties

Box 2: Accelerated Death Benefits Paid

Enter the total amount of accelerated death benefits paid this year under a life insurance contract. These payments must be for an insured person who has been certified as either:

1. Terminally ill, or
2. Chronically ill

Include in this amount:

• Payments made directly to the insured
• Payments made on behalf of the insured
• Any amount paid by a viatical settlement provider for the purchase or assignment of the insured's death benefit under a life insurance contract

Box 3: Payment Method for Long-Term Care Benefits

Check one box to indicate how the payments in Box 1 were made:

Per Diem or Other Periodic Basis

• Payments made at regular intervals
• Not based on actual expenses incurred

Reimbursed Basis

• Payments made to cover actual expenses incurred

Box 4: Qualified Contract (Optional)

Check the box to indicate whether long-term care insurance benefits are paid from a qualified long-term care insurance contract.

Box 5: Check if Chronically Ill or Terminally Ill (Optional)

• Check the box to indicate whether the insured was chronically or terminally ill. Also, enter the latest date certified.
• If the insured was neither chronically nor terminally ill, leave this box blank.

How to File Form 1099-LTC

You can file Form 1099-LTC, either electronically or by mail.

Electronic Filing (E-filing)

E-filing is the IRS-recommended method for its efficiency, accuracy, and prompt processing notifications.

To e-file Form 1099-LTC, you can choose an IRS-authorized e-file service provider, such as TaxZerone.

TaxZerone streamlines the e-filing process and allows you to complete it within minutes. Here's how it works:

1. Enter the required information, including:
• Payer's name, address, and Tax Identification Number (TIN)
• Policyholder and insured's name, address, and TIN
• Gross long-term care benefits paid and accelerated death benefits paid
2. Review all entered information for accuracy.
3. Transmit the form electronically to the IRS.
4. Provide a copy to the recipient.

Paper filing

While less efficient, paper filing remains an option for those who prefer it.

Steps for paper filing:

1. Download Form 1099-LTC from the official IRS website (www.irs.gov).
2. Print the form.
3. Complete all required fields.
4. Make a copy for your records.
5. Mail the original form to the IRS address specified in the Form 1099 General Instructions. The mailing address varies based on your state. Refer to the "Where to Send Form 1099-LTC - Mailing Address" section to find the correct address for your state.
6. Send a copy to the recipient by January 31st of the year following the reportable transaction.

Important considerations for paper filing:

• Mail forms several weeks before the deadline to ensure timely arrival.
• Use certified mail for proof of timely filing.
• Ensure all copies are legible.

As an alternative, you can choose to file Form 1099-LTC electronicall for faster processing and delivery, reducing the risk of delays or lost forms.

Where to send Form 1099-LTC - Mailing address

If you prefer paper filing, the mailing address for Form 1099-LTC varies depending on your business location. Below is a table summarizing the mailing address for Form 1099-LTC:

How to E-File Form 1099-LTC with TaxZerone

Before you start e-filing Form 1099-LTC, ensure you have all the necessary information to facilitate a smooth and efficient filing experience. Here’s what you need to gather:

Required information for filing Form 1099-LTC:

• Payer information:
• Name, address, and taxpayer identification number (TIN) of the recipient
• Policyholder information:
• Name, address, and taxpayer identification number (TIN) of the policyholder
• Insured information:
• Name, address, and taxpayer identification number (TIN) of the insured
• Transaction details:
• Gross long-term care benefits provided
• Accelerated death benefits paid

Steps to e-file Form 1099-LTC using TaxZerone:

Step 1: Complete Form 1099-LTC
Open Form 1099-LTC and fill out the necessary fields with the information you have gathered, including payer details, policyholder details, insured details, and transaction details.

Step 2: Review and transmit the return
Carefully review all the entered information to ensure accuracy. Once verified, transmit the completed Form 1099-LTC to the IRS electronically through TaxZerone's secure platform.

Step 3: Provide the recipient copy
After successfully transmitting the form to the IRS, send a copy of the completed Form 1099-LTC to the recipient. This ensures they can accurately report the income on their tax return.

Benefits of E-Filing Form 1099-LTC with TaxZerone

E-filing Form 1099-LTC with TaxZerone offers several advantages that streamline the filing process and ensure compliance with IRS requirements:

• IRS form validations: TaxZerone's system checks your returns for errors or missing information to ensure accuracy before submission.
• Email recipient copies: Conveniently send recipient copies of Form 1099-LTC via email and eliminate manual mailing.
• Secure portal access (ZeroneVault): Recipients can access their return copies anytime, anywhere through the secure ZeroneVault portal.
• Competitive pricing: TaxZerone offers industry-leading pricing, with rates starting as low as $0.59 per form, making it affordable for businesses of all sizes.

By using TaxZerone's e-filing solution, you can streamline your Form 1099-LTC filing. Save time, reduce errors, and provide a better experience for your recipients.