If I paid medical expenses but collected on a settlement that covered the expenses, can I still deduct them?

[dmoncrea]

Your colleague below posted the correct answer with cited resources.  Fyi

[dmoncrea]

Excellent response and that was my reading too. I just didn’t know how to do it the software.  Thanks very much!

[Barbmcm18]

So, if you are rewarded a settlement, in my case my father passed in 2005 with mesothelioma. Medicare is requesting repayment of their money that was used to pay out medical expenses. Is this amount deductible under medical expenses deducted from settlement monies awarded?

[Opus 17]

---

@Barbmcm18 wrote:

So, if you are rewarded a settlement, in my case my father passed in 2005 with mesothelioma. Medicare is requesting repayment of their money that was used to pay out medical expenses. Is this amount deductible under medical expenses deducted from settlement monies awarded?

---

No.  You can't take a tax deduction for something that is not part of your taxable income to begin with.  Because the wrongful death settlement arising from a physical illness or injury is not taxable, you can't deduct anything from it.  You just get less money than you expected.   Even though a taxpayer can sometimes deduct medical expenses they pay for a parent's medical care, you can't in this case because the expenses are already being paid with tax-free (non-taxed) money.

[Knercer52]

My husband received settlement but they deducted a few medical bills is that deductible from our taxes

[Opus 17]

---

@Knercer52 wrote:

My husband received settlement but they deducted a few medical bills is that deductible from our taxes

---

Generally no.  A legal settlement for physical injury, including medical expenses, is not considered taxable income.  Therefore, you can't take any deductions, because you are paying those expenses with money that is already tax-free.  If you received the cash, then paid medical bills, it's not an allowable deduction because the money was tax-free in the first place, and if the medical reimbursement was subtracted from the settlement and paid directly to the insurance company or doctor and you got the leftover funds, it's still not deductible for the same reason.