Are Medicare premium refunds taxable?


Editorial team Published on

Medicare premium reimbursements—such as those from a former employer or an HRA—are generally not taxable as long as they are used to pay for qualifying medical costs you already paid.

Key Tax Rules for Medicare Reimbursements

  • Not Taxable Income: Employer or HRA reimbursements for Medicare Part B or other eligible premiums do not count as taxable gross income.
  • No Double Dipping: Because the reimbursement pays you back for out-of-pocket money you already spent, it is tax-free, but you cannot also claim a tax deduction for those same reimbursed dollars.
  • Deducting Unreimbursed Costs: You can only deduct out-of-pocket Medicare premiums on your federal taxes if you itemize deductions and your total medical expenses exceed 7.5% of your adjusted gross income (AGI). You cannot deduct any portion that was already reimbursed.

For further reading on specific employer arrangements, see Employer Reimbursement for Employee Medicare Premiums.