A director who retired in May 2009 continues to have a portion of his medical insurance premiums paid by the cooperative. In 2009 he receives $ 750 in director fess. The coop pays his medical insurance premiums and he reimburses them for his 25% portion (same as in prior years). In prior years he paid SE tax on the director's fess and the unreimbursed portion of his medical insurance premiums. Now that he is retired and no longer provides any services to the coop is his unreimbursed medical insurance premiums paid after May 2009 still subject to SE tax ?
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I can't seem to find an IRS cite for a coop, but TTB 5-24 says that retired partners periodic payments are not subject to SE assuming no work is required to recieve the payment. This sounds similer. This is a good question, I'll keep looking... -
I researched this issue several years ago and concluded that it IS subject to SE tax.
If you find authority indicating otherwise, please advise.Comment
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Would there be a different treatment for 2010 when the only item would be the unreimbursed insurance premiums which would be reported in box 6?Comment
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