This reimbursement is a non-taxable benefit. It can complicate your life, however, if those payments cause your medical expenses to exceed the 10% of AGI threshold for deductible medical expenses, and you are filing Schedule A.
The amount you pay for health insurance is automatically carried over to Schedule A. However, because you didn't pay these premiums yourself, you cannot claim them as a deduction. To delete them from your deductible medical expenses, you can list them as "medical reimbursements."
To do this in TurboTax:
- Open your tax return.
- Choose the Federal Taxes tab.
- Click on Deductions & Credits.
- Select I'll choose what I work on.
- Scroll down to Medical.
- Click through the pages until you come to the page headed Tell us about anything received in medical reimbursements. (see the screenshot below). Enter the amount that your employer paid for your health insurance there.
