1

I have my health insurance in a uhc medicare advantage program. Last year, a rewards program was introduced in which I received a debit card for use in places such as a grocery store or pharmacy. Funds are added to the card for certain health-related activities--e.g., I received $10 a month for exercising at least 30 minutes during at least 10 days. I received no tax statement concerning this and a lady at uhc told me her supervisor believes it is not taxable. She was able to tell me how much I received for the year. My question is whether it needs to be reported on my federal tax forms and if so, where. Thanks in advance for any thoughts on the matter.

David
  • 93
  • 5
  • Only a guess, but I'd call them partial rebates of your insurance premium. If so they might decrease your medical deduction if you are spending enough in that category to have one, but aren't income. But this might make too much sense to be true. – keshlam Mar 30 '24 at 23:05

1 Answers1

1

Last year, the IRS issue a memorandum stating "Certain Wellness Benefits are Taxable".

According to this article, rewards earned through a rewards program are not considered taxable unless the rewards are in the form of cash or cash equivalents. If rewards earned in the form of a debit card can only be used for buying eligible items at participating retailers, the rewards are not considered taxable income.

I leave it to you to determine what is and what is not allowable.

Bob Baerker
  • 76,304
  • 15
  • 99
  • 175