Health Insurance

[debunkerhill]

Our 27 Y/O daughter has been living with us while pursuing her masters. She received the degree in early May and started a new job with employer provided health insurance. She does not qualify as our dependent for 2012 although she has continued to live with us through the end of 2012. We paid for private health insurance for her to assure continuation of coverage in the event she might be let go at the end of  her six months probationary period which ended in November. She made it OK so we cancelled the policy at that time.

Can the costof the private insurance be included as a medical expense on either her returnor on our return?

[mwcpa]

She can "deduct" the cost of the health insurance as a "medical" expenses (itemized deduciton, subject to the 7.5% AGI limit).  You have made a gift to her for the cost of the insurance and may be required to file a gift tax return.

www.irs.gov/publications/p502/ar02.html#en_US_2012_publink1000178947

"Generally, you cannot deduct any additional premium you pay as the result of including on your policy someone who is not your spouse or dependent, even if that person is your child under age 27"

[eapat]

You my be able to deduct the premium if your daughter falls into one of the exceptions:


Coverage for nondependents. Generally, you cannot deduct any additional premium you pay as the result of including on your policy someone who is not your spouse or dependent, even if that person is your child under age 27. However, you can deduct the additional premium if that person is:

• Your child whom you do not claim as a dependent because of the rules for children of divorced or separated parents,

• Any person you could have claimed as a dependent on your return except that person received $3,800 or more of gross income or filed a joint return, or

• Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2012 return.