Form 1099-LTC is an important form for businesses who work in healthcare and eldercare, like nursing homes and urgent care facilities, or financial firms and personal accountants. Additionally, insurance companies that pay long-term care insurance benefits must provide claimants with the 1099-LTC. These businesses and individuals are required to report to the IRS, using form 1099-LTC, the gross amount of long-term care benefits issued under an individual’s insurance contract. This happens annually.
Form 1099-LTC, also known as the Long-Term Care and Accelerated Death Benefits form, has specific language detailing “long-term care benefits.” According to the IRS, this means:
- Any payments made under a product that is advertised, marketed, or offered as long-term care insurance (whether qualified or not); and
- Accelerated death benefits paid under a life insurance contract or paid by a viatical settlement provider.
This might sound complicated, but the truth is that understanding your filing responsibility is often the hardest part of 1099-LTC. The form itself is simple and straightforward, but it requires accuracy. The best way to prevent mistakes on this crucial form is to invest in a software solution, like those that Advanced Micro Solutions offers. Our W-2 and 1099 Software is perfect for businesses who deal with multiple types of 1099 forms.
Who Needs to File 1099-LTC?
Only those with long-term care insurance contracts that are not tax qualified will need to report the gross amount of benefits to the IRS. Those with tax-qualified contracts do not need to file but are encouraged to keep their 1099-LTC forms for their personal records. In every case, though, the business or company needs to distribute 1099-LTC forms to all required parties.
Businesses and entities who need to file Form 1099-LTC are typically payers of long-term care benefits. This includes insurance companies, governmental units, and viatical settlement providers. These providers are detailed in the instructions of this form.
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How to File the 1099-LTC Form
Once you’ve determined you need to file form 1099-LTC, the process itself is fairly straightforward. The information required includes basic tax identification information, account numbers, and the name and personal information of the insured. That said, this information must be accurately calculated and transferred to the sheet, which can be difficult. Form 1099-LTC is often filed in bulk – the company responsible will distribute the form to many individuals instead of just a few. You’ll need to keep your data straight and accurate. This is how AMS can help.
Our W-2 and 1099 Software is the perfect solution to filing every type of 1099. The semi-automated system provides essential features for data entry, reporting, printing, security, and networking. This includes importing data for common files, including a common payee file, and automatically calculating some taxes.
Like many 1099 forms, the 1099-LTC has seen some changes in the past decade. Importantly, AMS has the ability to respond to and fulfill the functions these changes might bring. With this tool, you won’t have to check the IRS’s landing page every tax season. You can rest assured that the forms included on the software are the newest, most up to date available.