Question

Retirement medical benefit impact on my 1095 A form credit

Forum|Forum|3 years ago
April 5, 2023
1 reply
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The year 2022 is our first full year of retirement. We had a retirement medical benefit that paid a portion of our health insurance premium costs each month but only covered a portion of the ACA market place plan we purchased. We did not receive any documentation from our former employer or their benefits service provider for the retirement medical benefit provided in 2022.

2022 ACA plan total cost was $31,800.12 ($2,650.01 per month, 12 months)

2022 retirement plan total benefit was $11,458.48 ($ 1,041.68 per month, 11 months as benefit was cancelled by my former employer.

The difference of these two numbers is $20,341.64 and we paid this amount with taxable retirement income.

Should I take this as a medical expense itemized deduction or use Form 1095A to receive a credit?

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Ask the Experts - Refund - April 2023

M

MonikaK1

Since you received a Form 1095-A, you will need to enter the information from it into TurboTax. The IRS requires that the information be reported. TurboTax will then determine whether you are entitled to a Premium Tax Credit.

You must meet all of the following criteria to qualify for the premium tax credit:

You must get your health care coverage through the Marketplace
You can't be eligible for health care coverage through alternative options such as your employer or the government
Your income needs to fall within a certain range
Another person can't claim you as a dependent on their return
You must file a joint return if you're married

Please see this TurboTax tips article for more information.

To be tax deductible as itemized deductions, medical expenses must not be reimbursed. In other words, if your insurance company pays for your expense (or reimburses you for an expense that you initially laid out), such expenses are not deductible. It must be genuinely “out of pocket” in order for you to have a tax-deductible medical expense. If you pay part and your insurer pays part, the portion you pay is deductible.

You would only be able to get a deduction for Medical expenses if the total of these expenses exceeds 7.5% of your Adjusted Gross Income. For example, if your AGI is $50,000, the first $3,750 of qualified expenses (7.5% of $50,000) don't count.

See this article for more information regarding deductible medical expenses.

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