Hospital wrote off bill through Charity discount. Am I going to be billed for taxes?
I was in the hospital for a week and the hospital approved me for their Charity discount which covered the entire bill. Will I be responsible for the taxes?
- STEVEN FLv 74 weeks ago
If they applied a DISCOUNT, they are saying the amount billed is less, not that a debt was forgiven. Forgiveness of debts is taxable income. Discounts are not.
- JohnLv 54 weeks ago
Per the IRS, only companies whose primary business is in the financial field are to issue 1099-Cs. Consequently, you would not receive one from the hospital.
- PearlLv 74 weeks ago
i would ask a tax place about this
- Max HooplaLv 74 weeks ago
That should be a reduction in price not a write-off of what you owed. If it is a write-off, you will get an IRS Form 1099-C. Prices for various services charged by hospitals are not set in concrete. There is a full price charged to people who don't have insurance--this is something that has a high noncollectable rate, a contracted price with insurance companies that will be lower, often a lot lower--when my wife was in for surgery several years ago the contracted rate was less than 40% of what was originally billed--and a fantasy price that Medicare calls customary reasonable and ordinary that will be even lower (I saw one billing lowered by over 90% to get to the Medicare rate.)
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- Anonymous4 weeks ago
Only if they issue you a 1099 then you have to declare the amount as "income" and yes, it may be taxable considering on your return. How much money are we talking about?