Long Term Care Benefits Paid

[pattyg2]

I may be overthinking this.

Client is now receiving her Long Term Care benefits (reimbursement amount, so nontaxable). 

Question: When I total all her medical expenses do I need to then subtract the dollar amount of benefits received from LTC from her total medical expense to get to her medical deduction??

Then of course I would apply the 10% reduction on Schedule A.

I have tried hard to find an answer, but no definitive answer seems to be available.

Thank you, Pattg2

[sjrcpa · Accepted solution]

Yes reduce her deductible medical expenses by the amount received from the LTC policy.

[Just-Lisa-Now-]

YOU dont apply the 10% limitation (and its not 10% anymore), the program will make the adjustment for the 7.5% limitation as required...you input the full amount of deductible medical expenses.

[BobKamman]

I would subtract the LTC benefits from the LTC costs only.  Also, I think there's a $370 daily limit on nontaxable benefits.  I haven't seen any returns where benefits exceeded costs, but I have a couple clients who are paying on two policies (not sure why) so might profit from dementia or other ailments.  Also, policies that cover in-home nursing care might pay more than $11K/month.