Instructions For Form 8853 - 2009 (Page 7 of 8) in pdf

contract periods, then all such LTC

indicate whether the payments were

Line 18

contracts must be treated as computing

made on a reimbursement basis.

benefits on a daily basis.

If you have more than one LTC

Generally, do not include on line

period, you must separately

Method 2 —Equal Payment Rate

24 any reimbursements for

calculate the taxable amount of

CAUTION

qualified LTC services you

Under this method, your LTC period is the

CAUTION

the payments received during each LTC

received under a contract issued before

period during which the insurance

period. To do this, complete lines 18

August 1, 1996. However, you must

company uses the same payment rate to

through 26 on separate Sections C for

include reimbursements if the contract

compute your benefits. For example, you

each LTC period. Enter the total on line

was exchanged or modified after July 31,

have two LTC periods if the insurance

26 from each separate Section C on the

1996, to increase per diem payments or

contract computes payments at a rate of

Form 8853 that you attach to your tax

reimbursements.

$175 per day from March 1, 2009,

return. See the instructions for line 21

through May 31, 2009, and then at a rate

below for the LTC period.

Multiple Payees

of $195 per day from June 1, 2009,

Line 19

If you checked “Yes” on lines 15 and 16

through December 31, 2009. The first

and the only payments you received were

LTC period is 92 days (from March 1

Enter the total accelerated death benefits

accelerated death benefits that were paid

through May 31) and the second LTC

you received with respect to the insured

because the insured was terminally ill,

period is 214 days (from June 1 through

listed on line 14a. These amounts

skip lines 17 through 25 and enter -0- on

December 31).

generally are shown in box 2 of Form

line 26.

1099-LTC. Include only amounts you

You can choose this method even if

received while the insured was a

In all other cases in which you

you have more than one qualified LTC

chronically ill individual. Do not include

checked “Yes” on line 15, attach a

insurance contract covering the same

amounts you received while the insured

statement duplicating lines 18 through 26

period. For example, you have one

was a terminally ill individual. If the

of the form. This statement should show

insurance contract that pays $100 per day

insured was redesignated from

the aggregate computation for all persons

from March 1, 2009, through December

chronically ill to terminally ill in 2009, only

who received per diem payments under a

31, 2009, and you have a second

include on line 19 payments received

qualified LTC insurance contract or as

insurance contract that pays $1,500 per

before the insured was certified as

accelerated death benefits because the

month from March 1, 2009, through

terminally ill.

insured was chronically ill. Each person

December 31, 2009. You have one LTC

must use the same LTC period. If all the

period because each payment rate does

Line 21

recipients of payments do not agree on

not vary during the LTC period of March 1

The number of days in your LTC period

which LTC period to use, the contract

through December 31. However, you

depends on which method you choose to

period method must be used.

have two LTC periods if the facts are the

define the LTC period. Generally, you can

same except that the second insurance

After completing the statement,

choose either the Contract Period method

contract did not begin making payments

determine your share of the per diem

or the Equal Payment Rate method.

until May 1, 2009. The first LTC period is

limitation and any taxable payments. The

However, special rules apply if other

61 days (from March 1 through April 30)

per diem limitation is allocated first to the

persons also received per diem payments

and the second LTC period is 245 days

insured to the extent of the total payments

in 2009 under a qualified LTC insurance

(from May 1 through December 31).

the insured received. If the insured files a

contract or as accelerated death benefits

joint return and the insured’s spouse is

Line 22

with respect to the insured listed on line

one of the policyholders, the per diem

14a. See Multiple Payees on this page for

Qualified LTC services are necessary

limitation is allocated first to them to the

details.

diagnostic, preventive, therapeutic,

extent of the payments they both

curing, treating, mitigating, and

Method 1 —Contract Period

received. Any remaining limitation is

rehabilitative services, and maintenance

Under this method your LTC period is the

allocated among the other policyholders

or personal care services required to treat

same period as that used by the

pro rata based on the payments they

a chronically ill individual under a plan of

insurance company under the contract to

received in 2009. The statement showing

care prescribed by a licensed health care

compute the benefits it pays you. For

the aggregate computation must be

practitioner.

example, if the insurance company

attached to the Form 8853 for each

computes your benefits on a daily basis,

Line 24

person who received a payment.

your LTC period is 1 day.

Enter the reimbursements you received or

Enter your share of the per diem

If you choose this method for

expect to receive through insurance or

limitation and the taxable payments on

defining the LTC period(s) and

otherwise for qualified LTC services

lines 25 and 26 of your individual Form

different LTC insurance contracts

provided for the insured for LTC periods

8853. Leave lines 21 through 24 blank.

CAUTION

for the same insured use different

in 2009. Box 3 of Form 1099-LTC should

-7-

Instructions For Form 8853 - 2009 Page 7

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