IRS Chronically Ill Certification language
Executive summary
The IRS defines a “chronically ill individual” primarily by medical certification from a licensed health care practitioner and ties that definition to tax treatments for long‑term care benefits and related forms such as Form 1099‑LTC and Form 8853 (qualified LTC/accelerated death benefits) [1] [2] [3]. The statutory test centers on functional incapacity—inability to perform activities of daily living (ADLs) or severe cognitive impairment—with certification generally effective for 12 months and additional regulatory and state licensing rules shaping who may certify [4] [5] [1].
1. What the statute actually says: the three‑prong certification test
The core statutory language in IRC §7702B, echoed in IRS guidance, defines a chronically ill individual as someone certified by a licensed health care practitioner as meeting one of three conditions: (A) unable to perform without substantial assistance at least two ADLs for a period of at least 90 days due to loss of functional capacity, (B) having a level of disability similar to clause (A) as determined by regulations, or (C) requiring substantial supervision to protect from threats to health and safety because of severe cognitive impairment [4] [5].
2. Who can certify and how often: licensed practitioner and 12‑month window
IRS instructions and publications require the certification to be made by a licensed health care practitioner and generally to be current within the prior 12 months for the relevant tax treatments; several IRS documents repeat that the individual must have been certified within the past 12 months to qualify for certain exclusions or deductions [5] [2] [1]. State licensing rules and professional standards therefore matter, and the IRS references model NAIC rules for viatical and LTC evaluations when discussing provider requirements [1].
3. Forms and where the language appears: 1099‑LTC and Form 8853 guidance
Practically, the certification status appears directly on tax reporting and claiming forms: Instructions for Form 1099‑LTC tell payers to check a box to indicate whether the insured was chronically or terminally ill and to enter the latest certification date [1] [3], while Form 8853 instructions emphasize that only amounts received while the insured was a chronically ill individual are to be included for LTC‑style exclusions and that certification timing matters if someone is redesignated terminally ill [2].
4. Evidence and plan‑of‑care: what the IRS documents imply but doesn’t fully prescribe
IRS guidance and related state/industry materials discuss the need for a licensed practitioner’s certification and reference maintenance/personal care services as primary purposes of care for chronically ill individuals, but the IRS does not publish a single standardized “certification form” in its guidance; outside templates and industry forms exist and are used to document ADL incapacity or cognitive impairment, while NAIC model rules and state insurance authorities fill in procedural expectations [5] [1] [6]. Where precise documentation formatting or an explicit “plan of care” is required, public IRS sources are less prescriptive, leaving some operational details to insurers, practitioners, and state rules [1] [6].
5. Timing, tax effects, and the limits of public guidance
The tax consequences hinge on timing: the exclusion or reporting treatment generally applies only to amounts received while the insured met the chronically ill certification, and a redesignation to terminal illness changes what gets reported or excluded on forms like 8853 and 1099‑LTC [2] [3]. Similarly, trusts and retirement‑account rules that grant special treatment to “chronically ill” beneficiaries point to strict evidentiary hurdles and snapshot dates—issues IRS and Treasury regulations continue to refine, and outside commentators warn of rigid technical tests in practice [7].
6. Where ambiguity and practical friction remain
Practical questions—such as whether retrospective statements from a practitioner suffice to certify an earlier period, what exact documentation an IRA custodian or insurer will accept, and how state licensing differences affect the validity of a certification—are raised in practitioner forums and industry guides but are not exhaustively resolved in the IRS documents reviewed here [8] [9] [10]. Taxpayers and advisers therefore rely on a combination of statutory text, IRS instructions, NAIC guidance, state insurance rules, and insurer practices to operationalize the certification requirement [1] [4] [6].