i1099-ltc--2019-10-00

Instructions for Form
1099-LTC

Department of the Treasury
Internal Revenue Service

(Rev. October 2019)

Long-Term Care and Accelerated Death Benefits

Future Developments

Viatical Settlement Providers

For the latest information about developments related to Form
1099-LTC and its instructions, such as legislation enacted after
they were published, go to IRS.gov/Form1099LTC.

Reminders

In addition to these specific instructions, you should also use the
current General Instructions for Certain Information Returns.
Those general instructions include information about the
following topics.
• Who must file.
• When and where to file.
• Electronic reporting.
• Corrected and void returns.
• Statements to recipients.
• Taxpayer identification numbers (TINs).
• Backup withholding.
• Penalties.
• Other general topics.
You can get the General Instructions for Certain Information
Returns at IRS.gov/Form1099GeneralInstructions or go to
IRS.gov/Form1099LTC.
Continuous-use form and instructions. Form 1099-LTC and
these instructions have been converted from an annual revision
to continuous use. Both the form and instructions will be updated
as needed. For the most recent version, go to IRS.gov/
Form1099LTC
Online fillable form. Due to the very low volume of paper
Forms 1099-LTC received and processed by the IRS each year,
this form is available in an online fillable format. You may fill out
the form, found online at IRS.gov/Form1099LTC, and send Copy
B to the recipient. For filing with the IRS, follow the applicable
procedures for filing electronically, or, for this form only, if you
are qualified to file on paper, send in the black-and-white Copy A
with Form 1096 that you print from the IRS website.

Specific Instructions

File Form 1099-LTC if you paid any long-term care benefits.

Long-Term Care Benefits

A viatical settlement provider is any person who:
1. Is regularly engaged in the trade or business of
purchasing or taking assignments of life insurance contracts on
the lives of terminally or chronically ill individuals, and
2. Is licensed in the state where the insured lives. If licensing
is not required in the state, the provider must meet other
requirements (including those below) depending on whether the
insured is terminally or chronically ill.
a. If the insured is terminally ill, the provider must meet the
requirements of sections 8 and 9 of the Viatical Settlements
Model Act of the National Association of Insurance
Commissioners (NAIC), relating to disclosure and general rules.
The provider must also meet the requirements of the Model
Regulations of the NAIC for evaluating the reasonableness of
amounts paid in viatical settlement transactions with terminally ill
individuals.
b. If the insured is chronically ill, the provider must meet
requirements similar to those of sections 8 and 9 of the Viatical
Settlements Model Act of the NAIC and must also meet any
standards of the NAIC for evaluating the reasonableness of
amounts paid in viatical settlement transactions with chronically
ill individuals.
However, if a state enacts a licensing requirement but
does not permit viatical settlement providers to engage
CAUTION in business until the licenses are granted, the provider
will not be considered as licensed under section 101(g)(2)(B)(i)
(I). See Rev. Rul. 2002-82, which is on page 978 of Internal
Revenue Bulletin 2002-51 at IRS.gov/pub/irs-irbs/irb02-51.pdf.

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Qualified Long-Term Care Insurance Contract
A contract issued after 1996 is a qualified long-term care
insurance contract if it meets the requirements of section 7702B,
including the requirement that the insured must be a chronically
ill individual (see Chronically Ill Individual, later). A contract
issued before 1997 generally is treated as a qualified long-term
care insurance contract if it met state law requirements for
long-term care insurance contracts and it has not been
materially changed.

“Long-term care benefits” means:
1. Any payments made under a product that is advertised,
marketed, or offered as long-term care insurance (whether
qualified or not); and
2. Accelerated death benefits (excludable in whole or in part
from gross income under section 101(g)) paid under a life
insurance contract or paid by a viatical settlement provider.

An accelerated death benefit is any amount paid under a life
insurance contract for an insured individual who is terminally or
chronically ill. It also includes any amount paid by a viatical
settlement provider for the sale or assignment of a death benefit
under a life insurance contract for a chronically or terminally ill
individual.

Who Must File

Chronically Ill Individual

Payers of long-term care benefits who must file Form 1099-LTC
include insurance companies, governmental units, and viatical
settlement providers.

Oct 24, 2019

Accelerated Death Benefits

A chronically ill individual is someone who has been certified (at
least annually) by a licensed health care practitioner as:
1. Being unable to perform, without substantial assistance
from another individual, at least two daily living activities (eating,

Cat. No. 27981Y

toileting, transferring, bathing, dressing, and continence) for at
least 90 days due to a loss of functional capacity; or
2. Requiring substantial supervision to protect the individual
from threats to health and safety due to severe cognitive
impairment.

Truncating recipient’s TIN on payee statements. Pursuant
to Regulations section 301.6109-4, all filers of this form may
truncate a recipient’s TIN (social security number (SSN),
individual taxpayer identification number (ITIN), adoption
taxpayer identification number (ATIN), or employer identification
number (EIN)) on payee statements. Truncation is not allowed
on any documents the filer files with the IRS. A payer's TIN may
not be truncated on any form. See part J in the current General
Instructions for Certain Information Returns.

Terminally Ill Individual
A terminally ill individual is someone who has been certified by a
physician as having an illness or physical condition that can
reasonably be expected to result in death in 24 months or less
after the date of certification.

Account Number

The account number is required if you have multiple accounts for
a recipient for whom you are filing more than one Form
1099-LTC. Additionally, the IRS encourages you to designate an
account number for all Forms 1099-LTC that you file. See part L
in the current General Instructions for Certain Information
Returns.

Reporting

Report payments only if the policyholder is an individual.
Reportable payments are those made to the policyholder, to the
insured, or to a third party.
You may report benefits paid from each contract on a
separate Form 1099-LTC. At your option, you may aggregate
benefits paid under multiple contracts on one Form 1099-LTC if
the same information is reportable on the form for each contract
(other than the amount of benefits paid).

Box 1. Gross Long-Term Care Benefits Paid

Enter the gross long-term care benefits paid this year (other than
accelerated death benefits). These benefits are all amounts paid
out on a per diem or other periodic basis or on a reimbursed
basis. It includes amounts paid to the insured, to the
policyholder, and to third parties. You are not required to
determine whether any benefits are taxable or nontaxable.

Policyholder
The policyholder is the individual who owns the contract,
including the owner of a contract sold or assigned to a viatical
settlement provider. In the case of a group contract, the term
“policyholder” includes the certificate holder (or similar
participant). You must report long-term care benefits to the
policyholder even if the payments were made to the insured or to
a third party (for example, a nursing home, caretaker, or
physician). The policyholder may also be the insured.

Box 2. Accelerated Death Benefits Paid

Enter the gross accelerated death benefits paid under a life
insurance contract this year to or on behalf of an insured who
has been certified as terminally or chronically ill. Include the
amount paid by a viatical settlement provider for the sale or
assignment of the insured's death benefit under a life insurance
contract.

Enter the name, address, and TIN of the policyholder on
Form 1099-LTC. If the policyholder is not an individual, no
reporting is required.

Box 3. Check if Per Diem or Reimbursed
Amount

Check a box to indicate whether the payments were made on a
per diem or other periodic basis or on a reimbursed basis. For
accelerated death benefits, do not check a box if you made
payments on behalf of a terminally ill person. “Per diem basis”
means payments made on any periodic basis without regard to
actual expenses. “Reimbursed basis” means payments made for
actual expenses incurred.

Insured
The insured is the chronically or terminally ill individual on whose
behalf long-term care benefits are paid.
Enter the name, address, and TIN of the insured on Form
1099-LTC.

Box 4. Qualified Contract (Optional)

Statement to Policyholder and Insured

Check the box to indicate whether long-term care insurance
benefits are paid from a qualified long-term care insurance
contract. See Qualified Long-Term Care Insurance Contract,
earlier.

If you are required to file Form 1099-LTC, you must furnish a
statement or acceptable substitute to both the policyholder and
to the insured as shown.
IF the statement is for the ...

THEN use...

Policyholder

Copy B

Insured

Copy C

Policyholder and the policyholder is
the insured

Copy B (Copy C is optional)

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.
See Chronically Ill Individual and Terminally Ill Individual, earlier.

For more information about the requirement to furnish a
statement to the policyholder and to the insured, see part M in
the current General Instructions for Certain Information Returns.

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Instructions for Form 1099-LTC (Rev. 10-2019)