Is this taxable Income?

Swanson Member
edited February 2022 in The Water Cooler
I am retired. Each year my health insurance gives each myself and my wife a $900 "Health Fund" that I use to (partially) reimburse our Medicare premiums. It isn't money I contributed like a HSA. Is this taxable income to me? Do I need to subtract the amount from medical expenses I claim as a taxable deduction? Is it neither?


  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    Gee I don't know.  Do they give you a form for it?  Like a 1099R or 1099Misc or something?  My retirement reimburses us the medicare taken out of our SS checks.  Then I just enter the 1099R for my pension.  Since the medicare is reimbursed I don't enter it when I enter my Social Security SSA-1099 in Turbo Tax.  It's all moot anyway since I take the Standard Deduction and don't itemize anymore.  Most people are taking the Standard Deduction now since it's higher and a lot of deductions have been eliminated or limited.  And it takes a lot of medical to deduct.  
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Is this a Health Reimbursement Arrangement as described here?

    If so, I think it would not be considered taxable income but you should deduct any reimbursement you receive from insurance premiums or medical expenses you claim as a tax deduction. At the top of the medical expense section of Schedule A it says
    Caution: Do not include expenses reimbursed or paid by others. 

    Note: I am not a tax advisor.  Consult your tax advisor for any tax issues.
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  • BK
    BK Member ✭✭✭✭
    I suggest posting this question in the TurboTax community where you are likely to receive more responses.
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  • TTSguy
    TTSguy Member ✭✭✭✭
    If it's taxable you should receive a 1099 from them. I have a similar plan for $2400 and have never had to pay any taxes on it. Call your health care company and ask them if you'll receive a 1099 for your Fed taxs and see what they say. Yo should be able to look it up on website also.
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭
    Swanson said:
    Do I need to subtract the amount from medical expenses I claim as a taxable deduction?
    Yes, this. You can deduct your Medicare premiums paid minus this "preimbursement". 
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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    But as @volvogirl said, unless your out of pocket medical expenses are very high, it is unlikely you will get any reduction in your taxes.
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