The distribution came from tax rebates from the Fed. Gov. to BCBS and the company shared it with all policyholders. My insurance is supplemented through healthcare.gov
No, rebates are not taxable as long as you did not previously use the amount "rebated" as a deduction.
For example, if you entered health insurance premiums paid and they were deducted on Schedule A last year, a rebate of those expenses could be taxable. If you did not deduct the premiums, the rebate is not taxed.
No, rebates are not taxable as long as you did not previously use the amount "rebated" as a deduction.
For example, if you entered health insurance premiums paid and they were deducted on Schedule A last year, a rebate of those expenses could be taxable. If you did not deduct the premiums, the rebate is not taxed.
I did itemize deductions last year on Schedule A and health insurance premiums were included. Since only a percentage of the premiums are allowed as a deduction how do I report the rebate? I was going to deduct it from my medical expenses for 2018 since that is when it was received, but with the new tax laws I don’t think I will have enough to itemize.
If you had enough to itemize the medical expenses, the amount of the taxable portion is probably the entire amount. Lets say your AGI was 50,000, the floor (amount not deductible) would have been 3,750. You had 5,000 in medical expenses, 1250 is deductible. You get a rebate of 500, now you have 4500 in expenses, so your deduction would have been 750, claim the 500.The only portion of the rebate that would not be claimed is if the rebate is part of the "Floor" (the 7.5%). So if you had 3850 in expenses, were able to use 50, you would only claim 50. You claim the rebate up until the amount is no longer an issue, no longer "useable".
Look at the 2017 Schedule A line 4. If it is more than 500, claim the 500. If it is less, claim what was entered on line 4. Report the lesser of the two amounts.
The 7.5 of you AGI won't change.