If I am understanding correctly then yes, they are still considered income and thus taxable. Your employer isn't taxing it, the government is. In the government's eyes you are receiving let's say $1500 and paying $200 of that (or whatever the amount is) toward health insurance. You will still be taxed on the $1500.

Health Insurance is part of what your employer provides you.,so it's considered "earned" and taxable income.If your employer gives you a bonus,you pay taxes on it,right?

This post was edited by jannie on Mon, May 6, 13 at 9:00

Actually, health insurance premiums thru a group plan are paid with pre-tax dollars. Are you sure that the employer is taxing that portion of your pay? If you work for a small company, perhaps they need to be informed of that part of tax law. Most major companies use payroll specialists, tho.

It might not be clear on your paycheck stub, so be sure to ask the people in charge of payroll.

Not necessarily, often smaller corporations do not have a section 125 (which is what it sounds like here as they are not contributing and thus minimizing administrative cost) and thus premiums could be post tax. In that case, you may you be able to take some of the cost as a tax deduction at the end of the year.

Yes, you can deduct insurance premiums as part of your medical expenses if you itemize on your tax return.

Is that entirely a Federal deal, or are there variations from state to state?

ole (furriner) joyful