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Tax.appeal.168, Tax Accountant
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I am a clergy and pay self-employment taxes. My family is

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I am a clergy and pay self-employment taxes. My family is covered on my wife's medical/dental plan. The church where I work, reimburses me for the added portion that is deducted from my wife's pay to have myself and our children covered by her plan. What, if any are the tax ramifications for this, and what documentation do I need?
Submitted: 5 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 5 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

In brief, if it is an HRA (Health Reimbursement Arrangement), the reimbursements should be tax free. SEE BELOW;


A medical reimbursement plan is any plan or arrangement under which an employer (church) reimburses an employee for uninsured health or accident expenses incurred by the employee or their dependents. Health or accident expenses are defined in IRC Section 213(e). If done correctly, these reimbursements are paid to the employee tax-free.

The employer (church) must establish a formal written plan. Note that this benefit is employer funded. It cannot be funded by any means of salary reduction.
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