I have to redeem my mom's CD before the maturity date to purchase some heath care insurance. Will she have to claim this money on her income tax as income?
The interest actually earned will be income regardless. She has already paid income taxes on the money that went into the CD, and that is not taxed just because you redeem it. Certain deposits that are funded from pre-tax dollars, retirement accounts, may be taxed when cashed because they haven't been previously taxed. In theory, when they are redeemed, the person is in a lower tax bracket, so it can depend on the type of CD to which you are referring.
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The interest actually earned will be income regardless. She has already paid income taxes on the money that went into the CD, and that is not taxed just because you redeem it. Certain 