Notice: All new and existing entities will need to file a Beneficial Ownership Information Report with FinCEN. Click here to learn more.

MERP (Medical, [Dental and Drug] Expense Reimbursement Plan)

By IncNow | Published October 19, 2013

A plan which allows a corporation or LLC that elects to be taxed as a C-Corporation to deduct the cost of medical, dental, prescriptions, and non-prescription drug expenses not covered by health insurance. This allowable deduction is limited without the employee having to include the benefit in his or her income. Otherwise, the employee would have to pay for these benefits with after-tax dollars and could only deduct them personally if they exceeded 7.5% of adjusted gross income of the employee.

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go