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Get your taxes done using TurboTax
Thanks Brittany, I do understand that pretax health insurance premiums do not get reported. (In this case, they are deducted directly from my paycheck pre-tax to pay for my share of health insurance offered by my employer.) I also understand that the employer's contribution is also not reported or considered income. However, the HIPP reimbursements I receive from the state are the full gross amount of my own paycheck's health insurance pre-tax deductions without taking into account that I'm already not paying taxes on that amount. Wouldn't I have to somehow reconcile that the HIPP amounts are reimbursing me for pre-tax dollars? Let me offer an example. Let's say someone gets health insurance where the premiums are paid directly to the insurance company via HIPP. The insured person is not involved in the transfer of this money. The HIPP payments are not reported and have no effect on their taxes whatsoever. Agreed on this so far? Now let's say that the insured person pays their portion of health insurance premiums through their employer via a pre-tax deduction and then receives HIPP payments directly for the amounts of their already pretaxed premiums. In this case, the insured is getting a tax deduction on the insurance premiums even though they have in effect not really paid for them. Wouldn't this have to be reconciled somehow? @BrittanyS