My mom passed away in Nov. and I have overpaid the nursing home that she in by about $15000- what do I do with the refund check??

[nataliemarienich]

Last year my mom sold her house too.. so this $$ came from the selling of her house- her house sold for $60000- so the attorney helped me spend down her $$ so she could stay on Medicaid- but somehow we gave the home too much??  Now I have a refund check for $15000

[KittyM · Accepted solution]

As long as the sale of your mother's home was reported as required by law (at $60,000 it definitely qualifies for the home sale exclusion of $250,000 single/$500,000 married), and you did NOT claim the payments as medical expenses, you may cash the check and forget about it.

If you wrote off the medical payments on your taxes (or your mom's taxes), then the $15,000 needs to be added back into income because you wrote off more expenses than you actually paid.  (This is sort of like an insurance reimbursement that exceed the amount of your claim.)

The amount would be shown as Other Income, and it is NOT subject to employment taxes.  To enter it on your return, follow the instructions below:

• Sign into your return and Take me to my return.
• Choose the Federal return and the Wages & Income tab.
• Scroll down to Less Common Income and Show more.
• Choose Miscellaneous Income, 1099-A, 1099-C.
• Choose Other Reportable Income and say Yes.
• This is where you will enter the description "Refund of Medical Expenses," the amount you received, and who received it.