Anonymous
Anonymous asked in Business & FinanceTaxesUnited States · 4 weeks ago

Hospital wrote off bill through Charity discount. Am I going to be billed for taxes?

Update:

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?

5 Answers

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  • 4 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.

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  • John
    Lv 5
    4 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.

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  • Pearl
    Lv 7
    4 weeks ago

    i would ask a tax place about this

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  • 4 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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  • Anonymous
    4 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?

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    • Max Hoopla
      Lv 7
      4 weeks agoReport

      If one is issued it should be issued by January 31, 2020 but they could take several years to get around to it because issuers are unbelievably sloppy about getting them out. I had one client who didn't get his for seven years.

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