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HRA 105 For Medical Expenses [Ask The Experts Q&A]

Feb 14, 2012
Q: I set up an HRA 105 for my wife, who is employed by me in my home office. My understanding is that both her and my qualified medical expenses from the HRA can be deducted but cannot find a suitable category on TurboTax to enter this amount. Please advise where this amount is entered.


A: If I can be so bold, let me change your terminology a bit as it relates to your HRA 105 plan.  You DID NOT set up an HRA 105 plan for your wife, but instead your Company adopted an HRA 105 plan for the benefit of your employees.  Lose the word "wife" or "spouse" or anything else like that and just think in terms of your employee.

Second, forget about HER medical expenses or YOUR medical expenses and just think in terms of the business.  Your business is reimbursing all medical costs submitted to the company by your employee for which that employee can provide adequate documentation.  PERIOD!  You don't care for whom the individual covered person is, only that it is indeed the medical expenses incurred by your employee.

Now a note to your employee (your spouse).  The employee pays for all their own medical expenses and then provides adequate documentation to their employer for reimbursement.  The employee can request reimbursement for all qualified medical expenses, including those related to themselves (your wife), their spouse (you), their dependents (also your dependents).  I am splitting hairs here but if you keep the pronouns straight it is a bit easier to understand.  The key point here is that YOUR business is NOT reimbursing YOUR medical expenses, but instead YOUR business is reimbursing the medical expenses of your employee and HER SPOUSE.  Does that help?

Now that you see it that, your company simply has incurred costs associated with an Employee Benefit Program.  This is where the deduction ends up, Line 14, Employee Benefit Programs. 

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Courtesy of NASE.org
https://www.nase.org/business-help/get-help/health/health-blog/self-made/2012/02/14/HRA_105_For_Medical_Expenses_Ask_The_Experts_Q_A