If you had enough to itemize the medical expenses, the amount of the taxable portion is probably the entire amount. Lets say your AGI was 50,000, the floor (amount not deductible) would have been 3,750. You had 5,000 in medical expenses, 1250 is deductible. You get a rebate of 500, now you have 4500 in expenses, so your deduction would have been 750, claim the 500.The only portion of the rebate that would not be claimed is if the rebate is part of the "Floor" (the 7.5%). So if you had 3850 in expenses, were able to use 50, you would only claim 50. You claim the rebate up until the amount is no longer an issue, no longer "useable".
Look at the 2017 Schedule A line 4. If it is more than 500, claim the 500. If it is less, claim what was entered on line 4. Report the lesser of the two amounts.
The 7.5 of you AGI won't change.
