topic Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?! in Deductions & credits

Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

vickyvog — Tue, 24 Feb 2026 07:11:59 GMT

I'm confused about medical expenses and taxes. I got reimbursed through payroll however it was taxed. Do I put these claims in or not? I'm so confused.

Re: Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

DoninGA — Fri, 04 Aug 2023 20:43:22 GMT

Since your medical expenses you paid with out of pocket funds were reimbursed you cannot claim the medical expenses as a deduction on your tax return.

Re: Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

Opus 17 — Fri, 04 Aug 2023 23:08:34 GMT

@DoninGA

@vickyvog

I disagree with my colleague, if the facts are as you described. It would be very unusual for your medical expenses to be covered with taxable income by your employer. Most of the time, your expenses are covered by an employer insurance plan, that you pay for with pre-tax deduction from your pay. In this case, insurance reimbursements are not taxable, but you can’t claim a tax deduction for something that was reimbursed with tax free money. Another employer medical reimbursement arrangement is called an HRA, or healthcare reimbursement arrangement. An HRA is an account set up by your employer, that the employee is not allowed to contribute to, that the employee can use to reimburse medical expenses. HRA’s are not taxable, and expenses that are paid with an HRA can’t be used as a tax deduction.

However, you indicate that you were reimbursed with taxable income. This is unusual, but not impossible. This would be treated for payroll purposes as though you were given a raise or a bonus, that is included in your W-2 box 1 taxable income, and is subject to federal, state, Social Security, and Medicare taxes. In this case, it doesn’t matter what the raise or bonus was used for, whether it is used for moving expenses or a performance bonus, or a retention bonus, or to pay for unexpected medical bills. If it is part of your taxable box 1 wages, and you happen to use it for medical expenses, then you can still list those medical expenses as schedule A itemized deductions because you paid them with after-tax money.

Re: Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

vickyvog — Fri, 04 Aug 2023 23:39:37 GMT

@DoninGA thank you for your response, I really appreciate this! My workplace offers Family Benefits - a bit complicated but in this instance my doctor could not purchase on my behalf and charge back to my workplace Family Benefits (which is a 3rd party) but rather I could and claim it back through Family Benefits of which they reimbursed me and it came though my payroll, so from $18,190 I got back $10k with around $8k taxed. I was just trying to work out for next year's taxes but I suspect not given I've already been reimbursed. I am now guessing (as truly I have no idea), that taxes paid for this year will be expediential compared to what I normally contribute so maybe I just get tax back when I do my return. Anyway, I knew this would be a headache and it is... .

Thanks again for your help, I really do appreciate it.

Re: Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

Hal_Al — Sun, 13 Aug 2023 21:26:55 GMT

Q, Can I deduct medical expenses that were reimbursed by my employer, if the reimbursement was included as taxable income on my W-2.

A. Yes

As others have said, that situation is highly unusual. But, as you describe it, your medical expenses are deductible, , since the expenses were paid with your after tax money.

You may only deduct the portion of medical expenses that exceed 7-1/2% of Adjusted Gross Income (AGI) and then only as an itemized deduction. Your net total itemized deduction would then have to exceed your standard deduction ($12,950 Single, $25,900 married, under age 65) before you saw any benefit.

Re: Can I claim medical expenses on my taxes however I was reimbursed through payroll (but got taxed)?!

Opus 17 — Sun, 13 Aug 2023 22:25:39 GMT

@vickyvog

Note that even though there are limitations on medical expense deductions, you should list all your expenses in TurboTax and let Turbotax do the calculations as to how much deduction you actually take on your tax return.