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Taxability of Your Medical Subsidy

Taxability of Your Health Benefits
All Retired Members enrolling health plan dependents and all eligible survivors (i.e., surviving spouses/domestic partners) must complete and submit a Certification of Dependent or Survivor Status for Health Coverage form. The medical subsidy used to provide medical benefits to dependents might be reported as taxable income to the Retired Member or eligible survivor for Federal tax purposes.

A legal spouse is automatically considered a tax dependent and medical coverage will not result in imputed income. Other than this, LACERS cannot determine for you if your dependents are eligible to be claimed for federal income tax purposes.  If you have further questions, please contact the IRS and/or consult a tax professional for more information.

Those who fail to complete the Certification of Dependent or Survivor Status for Health Coverage form may have any portion of their medical subsidy used to cover any persons other than themselves reported to the Internal Revenue Service (IRS) as taxable income.

Those eligible survivors (i.e., surviving spouses/domestic partners) who fail to complete the Certification of Dependent or Survivor Status for Health Coverage form may have their entire medical subsidy reported to the IRS as taxable income.


Disclaimer:

LACERS cannot determine for you if your dependent(s) are eligible to be claimed for federal income tax purposes.  If you have further questions, please contact the IRS and/or consult a tax professional regarding the annual dependent requirements for federal income tax purposes. Additionally, State regulations are different for each State.  Please call your State Income Tax Authority.