The educational institution from which I retired about ten years ago has decided to give retirees $500 to help defray the cost of health insurance. Is this amount taxable? I am no longer an employee, receive no other income or support from the institution, have no official connection to the institution, and pay for my own health insurance because the institution does not provide it. I believe the $500 is a gift but would like confirmation.
Retirees do not receive tax free health benefits, and this was paid to you becaue you are a retiree.
Sounds to me like taxable income.
decided to give retirees $500 to help defray
employee, receive no other income or
and pay for my own health insurance
would like confirmation.
The best you can hope for is that the $500 is treated like reimbursement of a deductible medical cost and is therefore not taxable.
Aside: Lots of retirees receive tax free health benefits.
While it's not earned income subject to FICA and Medicare, it's income none the less.
On the other side of the coin, I got a phone call today from my educational institution of retirement with the news that they would only be paying 50% of my son's tuition this year!
I suggest you write a letter to the President of your past employer expressing your heart-felt for their kindness and pray they do it again.
Dick
I agree. It is just an increase of the taxable pension amount.
Interesting. Thanks. Until last year, retirees at my institution had been receiving health and prescription coverage, with some fees and copays. No one ever suggested that this was taxable.
It is not taxable. Art Kamlet's statement was way too broad. Of course, a former employer can provide tax-free health benefits, such as medical and dental coverage. What Art should have said, is that your former employer can not cut you a check to help you pay for medical insurance and not report it as taxable income.
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