
Form 1099-LTC and Instructions 
Long-Term Care and Accelerated Death Benefits
2011

Cat. No. 33593U

Department of the Treasury
Internal Revenue Service

In 1 File
Print pages 1-7 and 1-2

Transcribed by
The Lighthouse for the Blind
New Orleans, LA
2010

Contents

Section:  Page
Form 1099-LTC:  1
     Copy A--For IRS:  1
     Copy B--For Policyholder:  2
     Instructions for Policyholder:  3
     Copy C--For Insured:  4
     Instructions for Insured:  5
     Copy D--For Payer:  6
     Instructions for Payer:  7
2011 Instructions for Form 1099-LTC:  1
     What's New:  1
     Reminder:  1
     Specific Instructions:  1

This electronic edition contains the entire text of the print editions.

<page 1>

Form 1099-LTC
Long-Term Care and Accelerated Death Benefits
2011

Copy A
For Internal Revenue Service Center

File with Form 1096.

VOID --; CORRECTED --
PAYER'S name, street address, city, state, ZIP code, and telephone no.: ----
PAYER'S federal identification number: ----
POLICYHOLDER'S identification number: ----
POLICYHOLDER'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----
Account number (see instructions): ----

1. Gross long-term care benefits paid: $----
2. Accelerated death benefits paid: $----
3. Check one: Per diem --; Reimbursed amount --

INSURED'S social security no.: ----
INSURED'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----

4. Qualified contract (optional): --
5. Check, if applicable (optional): Chronically ill --; Terminally ill --
Date certified: ----

For Privacy Act and Paperwork Reduction Act Notice, see the 2011 General Instructions for Certain Information Returns.

<page 2>

Form 1099-LTC
Long-Term Care and Accelerated Death Benefits
2011

Copy B
For Policyholder

CORRECTED (if checked) --
PAYER'S name, street address, city, state, ZIP code, and telephone no.: ----
PAYER'S federal identification number: ----
POLICYHOLDER'S identification number: ----
POLICYHOLDER'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----
Account number (see instructions): ----

1. Gross long-term care benefits paid: $----
2. Accelerated death benefits paid: $----
3. Per diem --; Reimbursed amount --

INSURED'S social security no.: ----
INSURED'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----

4. Qualified contract (optional): --
5. (optional): Chronically ill --; Terminally ill --
Date certified: ----

This is important tax information and is being furnished to the Internal Revenue Service.  If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.

<page 3>

Instructions for Policyholder

A payer, such as an insurance company or a viatical settlement provider, must give this form to you for payments made under a long-term care insurance contract or for accelerated death benefits. Payments include those made directly to you (or to the insured) and those made to third parties.

A long-term care insurance contract provides coverage of expenses for long-term care services for an individual who has been certified by a licensed health care practitioner as chronically ill. A life insurance company or viatical settlement provider may pay accelerated death benefits if the insured has been certified by either a physician as terminally ill or by a licensed health care practitioner as chronically ill.

Long-term care insurance contract. Generally, amounts received under a qualified long-term care insurance contract are excluded from your income. However, if payments are made on a per diem basis, the amount you may exclude is limited. The per diem exclusion limit must be allocated among all policyholders who own qualified long-term care insurance contracts for the same insured. See Pub. 525 and Form 8853, and its instructions for more information.

Per diem basis. This means the payments were made on any periodic basis without regard to the actual expenses incurred during the period to which the payments relate.

Accelerated death benefits. Amounts paid as accelerated death benefits are fully excludable from your income if the insured has been certified by a physician as terminally ill. Accelerated death benefits paid on behalf of individuals who are certified as chronically ill are excludable from income to the same extent they would be if paid under a qualified long-term care insurance contract.

Account number. May show an account or other unique number the payer assigned to distinguish your account.

Box 1. Shows the gross benefits paid under a long-term care insurance contract during the year.

Box 2. Shows the gross accelerated death benefits paid during the year.

Box 3. Shows if the amount in box 1 or 2 was paid on a per diem basis or was reimbursement of actual long-term care expenses. If the insured was terminally ill, this box may not be checked.

Box 4. May show if the benefits were from a qualified long-term care insurance contract.

Box 5. May show if the insured was certified chronically ill or terminally ill, and the latest date certified.

<page 4>

Form 1099-LTC
Long-Term Care and Accelerated Death Benefits
2011

Copy C
For Insured

CORRECTED (if checked) --
PAYER'S name, street address, city, state, ZIP code, and telephone no.: ----
PAYER'S federal identification number: ----
POLICYHOLDER'S identification number: ----
POLICYHOLDER'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----
Account number (see instructions): ----

1. Gross long-term care benefits paid: $----
2. Accelerated death benefits paid: $----
3. Per diem --; Reimbursed amount --

INSURED'S social security no.: ----
INSURED'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----

4. Qualified contract (optional): --
5. (optional): Chronically ill --; Terminally ill --
Date certified: ----

Copy C is provided to you for information only.  Only the policyholder is required to report this information on a tax return.

<page 5>

Instructions for Insured

A payer, such as an insurance company or a viatical settlement provider, must give this form to you and to the policyholder for payments made under a long-term care insurance contract or for accelerated death benefits. Payments include both benefits you received directly and expenses paid on your behalf to third parties.

If you are the insured but are not the policyholder, Copy C is provided to you for information only because these payments are not taxable to you. If you are also the policyholder, you should receive Copy B.

Account number. May show an account or other unique number the payer assigned to distinguish your account.

Box 1. Shows the gross benefits paid under a long-term care insurance contract during the year.

Box 2. Shows the gross accelerated death benefits paid during the year.

Box 3. Shows if the amount in box 1 or 2 was paid on a per diem basis or was reimbursement of actual long-term care expenses. If you are terminally ill, this box may not be checked.

Box 4. May show if the benefits were from a qualified long-term care insurance contract.

Box 5. May show if you were certified chronically ill or terminally ill, and the latest date certified.

<page 6>

Form 1099-LTC
Long-Term Care and Accelerated Death Benefits
2011

Copy D
For Payer

VOID --; CORRECTED --
PAYER'S name, street address, city, state, ZIP code, and telephone no.: ----
PAYER'S federal identification number: ----
POLICYHOLDER'S identification number: ----
POLICYHOLDER'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----
Account number (see instructions): ----

1. Gross long-term care benefits paid: $----
2. Accelerated death benefits paid: $----
3. Per diem --; Reimbursed amount --

INSURED'S social security no.: ----
INSURED'S name: ----
Street address (including apt. no.): ----
City, state, and ZIP code: ----

4. Qualified contract (optional): --
5. Check, if applicable (optional): Chronically ill --; Terminally ill --
Date certified: ----

For Privacy Act and Paperwork Reduction Act Notice, see the 2011 General Instructions for Certain Information Returns.

<page 7>

Instructions for Payer

General and specific form instructions are provided as separate products. The products you should use to complete Form 1099-LTC are the 2011 General Instructions for Certain Information Returns and the 2011 Instructions for Form 1099-LTC. A chart in the general instructions gives a quick guide to which form must be filed to report a particular payment. To order these instructions and additional forms, visit IRS.gov or call 1-800-TAX-FORM (1-800-829-3676).

Caution: Because paper forms are scanned during processing, you cannot file Forms 1096, 1097, 1098, 1099, 3921, 3922, or 5498 that you print from the IRS website.

Due dates. Furnish Copy B of this form to the policyholder by January 31, 2012.

Furnish Copy C of this form to the insured by January 31, 2012.

File Copy A of this form with the IRS by February 28, 2012. If you file electronically, the due date is April 2, 2012. To file electronically, you must have software that generates a file according to the specifications in Pub. 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. IRS does not provide a fill-in form option.

Need help? If you have questions about reporting on Form 1099-LTC, call the information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free). For TTY/TDD equipment, call 304-579-4827 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern time.

<page 1>

2011 Instructions for Form 1099-LTC

Section references are to the Internal Revenue Code unless otherwise noted.

What's New

Pilot program for truncating an individual's identifying number on paper payee statements has ended. Filers of Form 1099-LTC must show the policyholder's and insured's (if applicable) complete identifying numbers on all copies of the form.

Reminder

In addition to these specific instructions, you should also use the 2011 General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G). Those general instructions include information about the following topics.
-- Backup withholding.
-- Electronic reporting requirements.
-- Penalties.
-- Who must file (nominee/middleman).
-- When and where to file.
-- Taxpayer identification numbers.
-- Statements to recipients.
-- Corrected and void returns.
-- Other general topics.

You can get the general instructions from IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Specific Instructions

File Form 1099-LTC, Long-Term Care and Accelerated Death Benefits, if you pay any long-term care benefits.

Long-Term Care Benefits

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.

Who Must File

File Form 1099-LTC if you paid any long-term care benefits, including accelerated death benefits. Payers include insurance companies, governmental units, and viatical settlement providers.

Viatical Settlement Providers

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.

Caution: However, if a state enacts a licensing requirement but does not permit viatical settlement providers to engage 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 www.irs.gov/pub/irs-irbs/irb02-51.pdf.

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 below). 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.

Accelerated Death Benefits

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.

Chronically ill Individual

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, 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.

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.

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).

<page 2>

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 also may be the insured.

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

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.

Statement to Policyholder and Insured

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.

Note: In this table, columns follow each other in this order: 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)

For more information about the requirement to furnish a statement to the policyholder and to the insured, see part M in the 2011 General Instructions for Certain Information Returns.

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 2011 General Instructions for Certain Information Returns.

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.

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.

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.

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. See Qualified Long-Term Care Insurance Contract on page 1.

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 on page 1.

End of Form 1099-LTC and Instructions
