If a medical expense reimbursement is received in a year after a deduction has been taken on a previous year's return,the previous year's return must be amended to eliminate the reimbursed expense.

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If a medical expense reimbursement is received after a deduction was taken in a previous year, the taxpayer does not amend the previous year's return. Instead, the reimbursement is included as income in the year it is received, to the extent that the deduction provided a tax benefit.

If a Medical Expense Reimbursement Is Received in a Year