COBRA subsidy question on reporting to IRS

RMD20201 — Thu, 12 Jun 2025 15:55:54 GMT

I have been making monthly COBRA Premium subsidy payments since Jan. 2025. My employer was supposed to pay to the third-party directly but long story short, I have been making the payments and now, the ex-employer will reimburse me for 'x' number of weeks as part of the severance which would be a lump sum, less applicable taxes, payroll deductions and withholdings.

Questions:

1) Should the COBRA reimbursement be taxed? I am looking at https://www.irs.gov/newsroom/cobra-questions-and-answers-for-employees-and-former-employees and looked at the section on "Taxability of Susidies", Q4. Based on this section/Q4, I will not qualify as the MAGI would exceed the threshold mentioned.

Or, should I ask the ex-employer to send a separate payment for the COBRA reimbursement that is not taxed?

2) Where would I report the COBRA payments I have made? Would it be Schedule A in the Medical section where I can only deduct the amount of COBRA premiums exceeding 7.5% of the AGI?

3) If I am a high-income individual where my MAGI exceeds the $145K threshold then it does not matter if the ex-employer reimburses the COBRA premium subsidy as part of the overall severance - is this an accurate statement?

Can you please help clarify this?

Thank you in advance.

topic COBRA subsidy question on reporting to IRS in Deductions & credits

COBRA subsidy question on reporting to IRS