My wife retired this year and gets a small pension from her company. From 1st January, they will refund her up to $8,000 towards medical insurance. They are calling it a stipend but the way they are administering it is my wife will submit a claim for a refund of the premium paid. They claim this means it is not reportable as income. Is this correct?

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My wife retired this year and gets a small pension from her company. From 1st January, they will refund her up to $8,000 towards medical insurance.====> She can deduct only premiums that she pays with after-tax money from her own pocket. So, if her health insurance premiums are paid entirely by her ER , she cannot deduct the cost on her return; Also if your spouse has health insurance through her ER and her share of the premium is deducted from her paycheck pre-tax, she cannot deduct the cost because the premiums were tax-free already.If she buys health insurance through the state- or federally run health insurance marketplaces, she can deduct only the portion of the premium she pays out of her own pocket. She cannot deduct the amount of any subsidy.


They are calling it a stipend but the way they are administering it is my wife will submit a claim for a refund of the premium paid. They claim this means it is not reportable as income. Is this correct?=====>>As mentioned above. The ER may reimburse the EE for all or part of her health insurance premiums by issuing a payment to her. However, she must provide proof of payment as well as proof that the coverage was in force for the time period represented by the payment. The ER may also give her a check made payable to her insurance company, which she must remit to her insurance provider. The ER has the option of making the check jointly payable to her and the insurance company. If the ER complies with the requirement to obtain proof from her that she used the funds to purchase health insurance, the payments are not taxable income.