We are a church in Texas. The pastor's contract with the church includes payment for health insurance for him and his family. The pastor's wife turned 65 this year and is now eligible for Medicare. We have agreed to pay her premiums (A,B, C, D), giving her the equivalent of the insurance that she had before. Now, instead of us paying the company directly, she is documenting her Medicare expenses and we are reimbursing her.
We've called the IRS several times, but we always get the lowest level peon who is either non-committal, or is "pretty sure" or has such bad grammar that we don't trust the answer. We can not get a straight answer from anyone at the IRS as to whether this is taxable income.
We have been providing insurance for her for 20 years and those premiums have not been taxable. So why should that change? So the question is, are insurance premium reimbursements considered taxable income?