topic We're helping our non-dependent son pay MD bills. Will he have to pay taxes on cash we give him? Will his getting $$ from us affect his ability to deduct health expenses? in Deductions & credits

We're helping our non-dependent son pay MD bills. Will he have to pay taxes on cash we give him? Will his getting $$ from us affect his ability to deduct health expenses?

grobinson117 — Fri, 26 Jul 2019 17:08:19 GMT

Does he have to declare the cash from us on his tax returns and pay tax on it? If he got the cash from us, can he still deduct the medical expenses on HIS taxes. (I know we can't claim them .on ours.)

Re: We're helping our non-dependent son pay MD bills. Will he have to pay taxes on cash we give him? Will his getting $$ from us affect his ability to deduct health expenses?

DoninGA — Fri, 26 Jul 2019 17:29:27 GMT

Any type of gift received from another individual is not reported on a tax return, regardless of the amount received. Since the gift is not reported it is not taxable income.

He can claim the medical expenses he paid for during the year on his tax return. However, for tax year 2019 and beyond only the medical expenses greater than 10% of AGI are deductible on Schedule A.

Re: We're helping our non-dependent son pay MD bills. Will he have to pay taxes on cash we give him? Will his getting $$ from us affect his ability to deduct health expenses?

TomD8 — Fri, 26 Jul 2019 19:32:46 GMT

If your gifts to your son exceed $15,000 in total during the year, you (the donor) may have to file a gift tax return, IRS Form 709. This is a required form for reporting purposes. Actual gift tax is not due until the lifetime amount exceeds $11.18 million.

For more details, see Who Must File on page 2 of this reference: https://www.irs.gov/pub/irs-pdf/i709.pdf

Note that your spouse may also gift $15,000 or less without a reporting requirement, so that the two of you may gift $30,000 in total without having to file Form 709.