I have a client that has a 1099LTC showing $138,945 in benefits received. The per diem box is checked so it is my understanding that up to $131,400 is excludable from income based on the per diem daily rate.
The Qualified box is NOT checked. From what I am reading, since it is not a Qualified contract, it is not taxable even if the amount received exceeds the per diem rate. Is that accurate? This is the first time I have seen one of these with the benefits so high. That taxpayer says that his total care/medical costs exceed the $138,945.
The Chronically Ill and Terminally Ill boxes are not checked. Taxpayer suffers from Parkinson's and has 2 full time caretakers staying with him.