About 5 years ago, a dependent attended a treatment facility in another state. All of the insurance checks were sent to me and I forward them on, since the facility was out of network. We thought this was all over and done, and the facility has since closed its doors.

But, last summer, the insurance company notified me that there were several checks uncashed and it would go to unclaimed funds if we didn't figure out what to do with it. Since then, they have sent me these checks, and the only option is to deal with it as income.

My question: how does the IRS view this scenario? Is this straight-up income? Is there some way I can deduct part or all of it? (We did pay quite a bit of money before insurance kicked in.)

What key words can I use while trying to hunt down answers on my own?

  • 2
    Is this reimbursement for what you paid? Or you should have forwarded the payment to the provider?
    – littleadv
    Commented Feb 20, 2023 at 18:53
  • @littleadv - The payment was forwarded, but the provider apparently didn't cash all of the checks. Commented Feb 20, 2023 at 22:04
  • then why is it income to you? The checks were in the provider's name?
    – littleadv
    Commented Feb 20, 2023 at 22:24
  • @littleadv Because the insurance company had to pay someone, and the facility is out of business. So, I got it. Commented Feb 21, 2023 at 4:46
  • 1
    I guess lucky you. The provider no longer exists but you got the money? Put it on misc income (line 8z of schedule 1).
    – littleadv
    Commented Feb 21, 2023 at 5:56


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