Are health stipends and retirement stipends considered taxable income?

Yes, health stipends and retirement stipends are generally considered taxable income to the recipient. Here’s a breakdown of each: ### Health Stipends Health stipends are payments made by an employer to an employee to help cover the cost of health insurance or other medical expenses. These stipends are typically considered taxable income for the employee because they are not provided under a tax-advantaged health plan. - **Taxable Income**: Health stipends are included in the employee's gross income and are subject to federal income tax, Social Security tax, and Medicare tax. The employer should report these amounts on the employee's Form W-2, in Box 1 (Wages, tips, other compensation), Box 3 (Social Security wages), and Box 5 (Medicare wages and tips). ### Retirement Stipends Retirement stipends are payments made to an individual, often a retiree, to supplement their income. These stipends are also generally considered taxable income. - **Taxable Income**: Retirement stipends are included in the recipient's gross income and are subject to federal income tax. Depending on the nature of the stipend and the recipient's tax situation, they may also be subject to state income tax. The payer should report these amounts on Form 1099-MISC or Form 1099-NEC, depending on the nature of the payment. ### Exceptions and Considerations - **Qualified Health Plans**: If the health stipend is provided through a

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