Answer To A Forthcoming Question

Jul 17, 2012 4 Replies
A

Shortly, someone is going to post the following: I just received a rebate check in the mail on my medical insurance. Is it taxable?



The reason for this question is that under the Affordable Care Act, health insurance companies who failed the 80/20 (also the 85/15) rule must send rebates no later than 8/1/12.



Kiplinger.com explains why the rebates are going out (the 80/20 and



85/15 rule) and who may have to pay tax on the health insurance rebate:

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P

got lotto numbers, too? ;)

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A

The 4 digit number of the last tax bill passed by Congress plus the last two digits of the year it was enacted.

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R

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The article is good, but in practice I think most people won't pay tax on it because there is no 1099 form associated with it.

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D

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The article is good, but in practice I think most people won't pay tax on it because there is no 1099 form associated with it. ============== Or is de minimus. I've heard that for my policy class and state, the rebate I shall receive is only $3.19. As that does not change the $50 tax table line in the year it was deducted, its recovery does not affect prior year tax and therefore may be ignored (i.e. there was no tax benefit from its deduction). IRC Section 111 only mandates inclusion as income where there was a prior tax benefit.

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