Retiree reimbursenet of medical and dental insurance premiums

[tutelo]

I am retired.  My former employer reimburses me for my medical and dental insurance premiums.  They gave me a 1099 Misc with the amount listed in Box 6.  Is this taxable?  If nontaxable, how do I indicate on my tax return?

[PattiF]

This income is not taxable. You will enter this as income and then subtract the same amount back so there is no taxable amount.

For this two-step process, first, enter the 1099-MISC as Other Income:

Follow these steps in TurboTax Online:

• In the Federal section, under Your income and expenses
• Scroll to Other Common Income
• Select Form 1099-MISC
• Follow the Prompts and enter amount in Box 3, Continue
•  Describe the reason for this 1099-MISC box
• Do any of these uncommon situations apply? check last box
• Select No, it didn't involve work like my main job on Did the Retiree medical insurance premiums involve work that's like your main job?
• Answer How often did you get income...Although you may receive this income every year, say that you only receive the 1099-MISC only in 2022, not in previous years and not in 2023, you will then have the screen where you can say that it did not involve an intent to earn money.
• Select No on Did the retiree medical insurance premiums involve an intent to earn money?

Then follow the same steps and use a negative number to zero this out.

From the IRS:

• Rev. Rul 62-199 states that "amounts paid by the company under the plan as its share of the cost of providing hospital, medical and surgical insurance coverage for the retired employee are excludable from gross income for purposes of Sec. 106 of the IRC.

[tutelo]

For clarification, my 1099-MISC has the amount in Box 6, not box 3

[TeresaM]

Yes, the description for Box 6, on Form 1099-MISC, is  Medical and health care payments, so your employer put it in the proper field. The directions above work for Box 6 as well as some of the other fields, where we need to show the form in the return but not have the income included as taxable.   It is truly a Miscellaneous Form 1099. 

[tutelo]

Thank you for your response.  Box 6 on my 1099 wants me to have a business because the definition is not for a retiree benefit, but assumes that I was compensated as a business for rendering health services to my company.  It does not assume that I received a retirement benefit from my employer. 

I still need a way to report this 1099MISC  income with an amount in Box 6, and to offset it.  I am an individual.  I am retired.  I do not have a business.  Can you please help walk me through the entries?  I tried a negative entry in accordance with the previous response but that did not change anything on Turbo tax. 

Thank you so much!

[PattiF]

Here are steps from @AmyC to enter the form for medical insurance reimbursements and back it out of your return with slightly different steps than listed before.

Two steps, enter it as income and then subtract it back out.

Step 1 To enter it as income:

You can enter it as other income. Follow these steps:

1. Log into your return
2. Federal
3. Click on Income
4. Scroll to the bottom section, Less Common Income
5. Select Miscellaneous income, 1099-A, 1099-C, start
6. Select Other Income
7. Did you receive other wages? Yes
8. Continue
9. Household employee? Continue
10. Sick or disability pay? Continue
11. Any other earned income or wages? Yes
12. Enter source of Other Earned Income
13. Select Other
14. Continue
15. Enter description 1099MISC box 3
16. Enter amount

Step 2 remove it from income

Go through all the same steps but changes at:

• description exempt income and state ruling
• amount enter negative amount

@tutelo 

[JSPapa]

I tried the solution proposed by PattiF as well as AmyC and upon the Turbotax review it reports an error because one cannot have negative values in those boxes.  Please advise.

[JohnW152]

Try this.  In TurboTax Online:

1. If you don’t see 2022 TAXES in the left pane, select the dropdown to the right of Income & Expenses on the Hi, let’s keep working on your taxes! page and then select Let’s get started, Pick up where you left off, or Review/Edit. 
   • Otherwise, in the left pane, select Federal, then Income & Expenses (This is labelled Wages & Income in TurboTax Self-Employed)
2. Scroll down and select the Show more dropdown to the right of Less Common Income
3. Select  Start or Revisit to the right of Miscellaneous Income, 1099-A, 1099-C
4. On the  Let's Work on Any Miscellaneous Income page, select Start or Revisit to the right of Other reportable income
5. On the  Any Other Taxable Income? screen, select Yes
6. On the  Other Taxable Income screen, enter Medical Insurance Reimbursement as the description, and the Form 1099-MISC amount, then select Continue
7. On the  Other Miscellaneous Income Summary screen, select Add Another Income Item
8. On the  Other Taxable Income screen, enter Exempt Income as the description, then the Form 1099-MISC amount with a negative sign before it, then select Continue
9. On the  Other Taxable Income screen, select Done

@JSPapa