If I live in NJ and paid $6,589 (pre-tax) last year for medical benefits through payroll deductions. Does this cost qualify as nonreimbursed medical expenses?

[BobB7]

{withdrawn because rjs' answer is so much more informed than mine]

[is_rg]

As per NJ deductions: "You can deduct certain medical expenses that you paid during the year for yourself, your spouse or domestic partner, and your dependents. ... Insurance premiums, including amounts paid under Social Security for Medicare, can be used as medical deductions."

does that mean in addition to pretax Medical, Dental and Vision premiums, we can also deduct medicare premiums (1.45% of social security wages) from NJ taxable income?

[DMarkM1]

When you enter the form 1099-SSA information that includes the deduction for Medicare premiums in the Federal interview that amount transfers over to the NJ return for the medical expenses deduction automatically.  

[geoffreytevans]

"You can include the medical and dental insurance premiums. You cannot include the health care FSA. However, you can include medical expenses that were paid from your health care FSA. (You cannot include those expenses in the medical expenses on your federal tax return.)"

Can someone confirm that this information is still accurate?  (3 years later, law might have changed...)

Also, if possible, some authoritative document or source?

I just talked to someone at the NJ department of taxation.  I asked him whether I could count (as "medical expenses" for NJ tax deduction) medical expenses which I paid and then was reimbursed for from my (federal employee) FSA.  He thought the answer was no, but seemed unsure, and seemed to be basing this on the fact that the NJ-1040 instructions only mention being able to deduct "unreimbursed medical expenses".

Elsewhere, the NJ department of taxation says:

"Medical Expenses
You can deduct from your gross income certain medical expenses that you paid during the year for yourself, your spouse or domestic partner, and your dependents. However, you cannot deduct expenses for which you were reimbursed. ..."

That seems to agree with the guy saying I can't deduct those expenses.  However, I am *GUESSING* this just refers to reimbursement by insurance, etc., not from my own pre-tax money.  That said, I'd much prefer to see something authoritative rather than making a large deduction based on a guess.

TIA for any help

[DawnC]

You can't claim expenses reimbursed to you from an FSA - you already got a tax deduction for the amount reimbursed from your FSA - that money was removed from your taxable wages on your W-2 (or should have been).    Deducting an expense that you already got a tax break on is double-dipping.   Deductible medical expenses are those which you paid for with money you paid tax on.    Amounts that were removed from your wages for income tax purposes (non-taxable income) cannot be taken as a tax deduction.  

If you take a tax deduction for a medical expense and then get reimbursed, you have to claim the reimbursement as income.   But if you get reimbursement and did not take a tax deduction, the income is not taxable to you.   See Pub 969 - I am guessing NJ has the same rules.  

[geoffreytevans]

Hang on, though...

I *think* my FSA only shelters me from federal tax.  (My W-2 box 16 "state wages" are the same as my gross income.)  Assuming that's right, then the medical expenses I'm paying for and getting repaid for out of my FSA are being paid for with money on which I've already paid state tax. ... right?  And therefore, if I claim those expenses, I would not be double-dipping.  I think?

[AmyC]

Correct, money that was taxed and not reimbursed qualifies.  Page 22 of the NJ instructions show medical deductions allowed.

@geoffreytevans