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Submitted By: someone
Answered: July 22, 2019 3:14 am
Answered: July 22, 2019 3:14 am
I received $1,000 from my employer in lieu of taking company health coverage. Since this was not for work performed, do I have to report this as income?
Yes. There is no exclusion from income for the payment from an employer to an employee who opts not to take company health coverage. This is so even though you would not have been taxed on the health insurance if you’d opted for it instead of the cash payment.
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Tax Glossary
Withholding
An amount taken from income as a prepayment of an individual’s tax liability for the year. In the case of wages, the employer withholds part of every wage payment. Backup withholding from dividend or interest income is required if you do not provide the payer with a correct taxpayer identification number. Withholding on pensions and IRAs is automatic unless you elect to waive withholding.
