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If an employee is reimbursed by their employer for personally paying health insurance premiums, is the money received by the employee subject to withholding, social security and medicare tax?


ANSWER


Expert Charles Markham's Answer:

 The IRS recenlty made a ruling on this.

 

Prior to 1/1/2014, this was a non-taxable payment.

 

Starting 1-1-2014, such a payment would be taxable income to the employee.  This is due to a change in law caused by Obamacare.

 

 

Charles Markham, EA

Massachusetts

20+ yrs experience

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