You don't want to make a mistake on your tax return.
Q. In 2020, I took a New Jersey medical expense deduction for the insurance premiums that I paid out of pocket that year. The following year, in 2021, the insurance company refunded a part of my insurance premium. Do I include it as income in my 2021 taxes?and federal income taxes.
“However, if an individual pays out-of-pocket for their medical premiums with after-tax dollars, then the healthcare premiums are potentially deductible as an itemized medical expense subject to the 7.5% of adjusted gross income rule for federal tax purposes,” Maye said. “This typically occurs for individuals who are not working and paying their medical premiums with after-tax dollars.”is potentially income the following year depending on the circumstances, Maye said.
“For self employed individuals who deduct their premiums as a reduction of their AGI the refund is fully taxable,” he said.Maye said the state of New Jersey treats healthcare premiums paid by employees differently than federal purposes.