Question

Can I claim medical expenses if they were reimbursed by a health care sharing ministry?

Forum|Forum|7 years ago
June 6, 2019
7 replies
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I do not have insurance but am a member of a health care sharing ministry. Can I claim medical expenses if they were reimbursed by the health care sharing ministry (not insurance)?

TurboTax Deluxe Online

J

JulieH1

Did the ministry pay directly to the provider (hospital. doctor, etc) or pay you back after you paid the provider?

F

firekayakAuthor

I paid the medical bills out of pocket and the ministry paid me back (as long as 120 days after submitting the bills).

F

Firefly

firekayak, see my answer below. Did you decide to deduct the medical expenses?

B

boykev

Is there any update on this? I understand that CHM is not considered insurance so it seems to be kind of a gray area.

J

JulieH1

Your situation is somewhat of a "hot topic" in tax law.

Several years ago, the answer to your question would be a "no" that you cannot deduct something that you did not pay or for which you were reimbursed later.

However, now the answer is a "maybe."

There was a ruling in the Judith Lang case that allowed Ms. Lang to deduct expenses because the amount she received to pay the medical bills was a "gift" ( http://www.ustaxcourt.gov/inophistoric/la5ng.tcm.wpd.pdf )

Ms. Lang's mother paid her medical expenses and real estate taxes. Ms. Lang was not a minor. The Tax Court ruled that in effect the amount was a gift to the daughter, and deductible by the daughter as if she had paid it herself.

A key point in the case was “petitioner [Judith Lang] was not a minor, and Mrs. Field [Judith Lang’s mother] was not legally obligated to pay petitioner’s expenses.” If Mrs. Field was obligated to pay the expenses, then her daughter may not have been able to deduct them, as they wouldn’t have been a gift.

Like your situation, you are not a minor (I assume) and the organization had no obligation to pay on your behalf.

Unlike your situation, the mother, in that case, paid directly to the hospital which your organization did not.

Would the IRS and tax court see your situation the same? No one can be sure, so if you deduct the expenses and get audited then you would have to try to make the comparisons between your case and that one that the money from the charity was a gift. Then you may need to pay taxes on the gift which is a whole different issue.

G

gregandjane

Additionally, the monthly share amounts are not deductible as health insurance nor as charitable contributions.

F

Firefly

You would not owe taxes on the gift; gifts are not taxable to the recipient. The person giving the gift would need to pay taxes on amounts greater then $14,000 given to one individual. So gift tax would not come into the equation in this instance since the gifts are from multiple members of the health sharing ministry, no one member giving over $14,000 to another member.
This is how I look at it: The monthly share amount is not deductible as health insurance nor is it deductible as charitable giving since you are not giving it to a charity. So no one has deducted the amounts given. So that leaves the recipient of the share to be able to deduct the medical expenses he pays on his sch. A as medical expenses.

J

JackieG8

I'm just wanting an updated answer for 2023 taxes. Thanks

I have both reimbursed medical expenses and non-reimbursed medical expenses from my Health Sharing Ministry. Can I claim all of them?

I do pay for dental, vision and medical accident insurance. Can all of these premiums be deducted as well?

DoninGA

Employee

@JackieG8 You cannot enter a reimbursed expense as an itemized medical expense deduction. Dental and Vision premiums paid are deductible. Accident insurance premiums are not deductible.

Health care insurance premiums, including dental and vision insurance premiums, and other medical expenses that you paid with out of pocket funds and were not reimbursed are an eligible medical expense that you can deduct using Schedule A for itemized deductions. However, only your total medical expenses that are greater than 7.5% of your Adjusted Gross Income (AGI) can be deducted. Your total itemized deductions reported on Form 1040 Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older