Is this income taxable or is it a gift?


R

Rita Goldberg

The educational institution from which I retired about ten years ago has decided to give retirees $500 to help defray the cost of health insurance. Is this amount taxable? I am no longer an employee, receive no other income or support from the institution, have no official connection to the institution, and pay for my own health insurance because the institution does not provide it. I believe the $500 is a gift but would like confirmation.
 
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A

Arthur Kamlet

The educational institution from which I retired about ten years ago has
decided to give retirees $500 to help defray the cost of health
insurance. Is this amount taxable? I am no longer an employee, receive
no other income or support from the institution, have no official
connection to the institution, and pay for my own health insurance
because the institution does not provide it. I believe the $500 is a
gift but would like confirmation.

Retirees do not receive tax free health benefits, and this was paid
to you becaue you are a retiree.


Sounds to me like taxable income.
 
B

Bill Brown

The educational institution from which I retired about ten years ago has decided to give retirees $500 to help defray
the cost of health insurance. Is this amount taxable? I am no longer an employee, receive no other income or
support from the institution, have no official connection to the institution, and pay for my own health insurance
because the institution does not provide it. I believe the $500 is a gift but would like confirmation.
The best you can hope for is that the $500 is treated like
reimbursement of a deductible medical cost and is therefore not
taxable.

Aside: Lots of retirees receive tax free health benefits.
 
D

Dick Adams

Rita Goldberg said:
The educational institution from which I retired about ten years ago
has decided to give retirees $500 to help defray the cost of health
insurance. Is this amount taxable? I am no longer an employee, receive
no other income or support from the institution, have no official
connection to the institution, and pay for my own health insurance
because the institution does not provide it. I believe the $500 is a
gift but would like confirmation.
While it's not earned income subject to FICA and Medicare, it's
income none the less.

On the other side of the coin, I got a phone call today from my
educational institution of retirement with the news that they
would only be paying 50% of my son's tuition this year!

I suggest you write a letter to the President of your past employer
expressing your heart-felt for their kindness and pray they do it
again.

Dick
 
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removeps-groups

Retirees do not receive tax free health benefits, and this was paid
to you becaue you are a retiree.

Sounds to me like taxable income.
I agree. It is just an increase of the taxable pension amount.
 
R

Rita Goldberg

Retirees do not receive tax free health benefits, and this was paid
to you becaue you are a retiree.

Sounds to me like taxable income.
Interesting. Thanks. Until last year, retirees at my institution had
been receiving health and prescription coverage, with some fees and
copays. No one ever suggested that this was taxable.
 
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A

Alan

Interesting. Thanks. Until last year, retirees at my institution had
been receiving health and prescription coverage, with some fees and
copays. No one ever suggested that this was taxable.
It is not taxable. Art Kamlet's statement was way too broad. Of course,
a former employer can provide tax-free health benefits, such as medical
and dental coverage. What Art should have said, is that your former
employer can not cut you a check to help you pay for medical insurance
and not report it as taxable income.
 

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