If a Form I099-INT for the interest income earned on the Medicare Set-aside is sent may the injured party pay the incremental income tax on that amount from the Medicare Set-aside?
A33. Yes. Assuming there is adequate documentation for the amount of incremental tax that the injured party must pay for the interest earned on the Medicare Set-aside funds, the injured party or his/her administrator may withdraw an amount equal to the additional tax as a cost that is directly related to the Medicare Set-aside account to cover the additional tax liability. Such documentation should be submitted to CMS along with any annual accounting.
Related Questions
- If the injured party receives a Form I099-INT for the interest income earned on the Medicare Set-aside may the injured party charge the income tax on that amount against the Medicare Set-aside?
- Has HUD developed a form for PHAs to use to determine if someone qualifies for the Earned Income Disallowance (EID)?
- Can Form 1040EZ be used to claim the Earned Income Credit?
