Dear all,
My former employer gave me a compensation to assist with cobra related costs upon separation last year (no proof from my side is required). I ended up only signing up for Cobra dental and purchased the medical plan through healthcare marketplace (much more affordable). The former employer reported the Cobra payment on 1099-MISC, but the rest of the severance pay on W-2.
My questions are -
1. Since I only used part of this cobra payment on Cobra premiums, what are the tax implication?
2. Is the cobra payment considered "job-related" or "non-job related" income? (a TurboTax question)?
3. Is the payment only subject to income tax or social security and Medicare taxes as well? Thanks!
