Can I Deduct Health Insurance Premiums on My Taxes?
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You generally cannot deduct health insurance premiums from your taxes if you receive health coverage through your employer. However, your health insurance premiums should be fully tax deductible if you are self-employed and partially tax deductible if you otherwise pay for your own health plan.
Read below for a detailed overview of when health insurance is tax deductible and what other medical expenses you may be able to subtract from the income you have to pay taxes on.
Is Health Insurance Tax Deductible?
Whether you can deduct health insurance premiums from your taxes depends on the type of coverage you have and the extent to which you pay for that coverage yourself.
Employer-Sponsored Health Insurance
Employer-sponsored group health insurance premiums generally aren’t tax deductible because you don’t directly pay them. Instead, your employer pays part of the health insurance premium and your contribution to the premium payments is typically deducted from your paycheck on a pre-tax basis. As a result, the money used to pay for your health plan is never part of your gross income and thus can’t be deducted from your taxes.
Self-Employed Health Insurance
Conversely, if you are self-employed, you may be able to deduct the total amount of money you spend on health and dental insurance premiums from your taxes as long as your business has a net profit for the year. However, if you or your spouse are eligible for health insurance through an employer at any point during the year, you can’t deduct your health insurance premiums for those months.
ACA Marketplace Plans
If you buy your own health plan through the Affordable Care Act (ACA) Health Insurance Marketplace and itemize deductions on your tax return, you can deduct qualifying medical expenses including insurance premiums if those expenses exceed 7.5% of your adjusted gross income (AGI). For example, if your AGI for the year is $70,000, you will have to spend $5,250 out of pocket on covered medical services or premiums before you can start deducting these expenses from your taxes.
It’s worth noting that you can qualify for a tax credit that will lower the cost of health insurance through the Marketplace if your income is between 100% and 400% of the federal poverty level and in some cases even if it’s above 400%. However, if you use a tax credit to lower your monthly premium payments, you can only deduct the percentage of the premiums that you pay out of pocket from your taxes.
Keep in mind that you can’t use both itemized deductions and the standard deduction, which is a blanket amount that most taxpayers can subtract from their taxable income. As a result, you should only subtract your medical expenses through itemized deductions if the total deducted amount is greater than the standard deduction. The below table goes over the standard deductions for the 2023 tax year, which will apply to tax returns filed in 2024.
Tax Filing Status
Single or married filing separately
Head of household
Married filing jointly
For example, if you are single, have an AGI of $70,000 and spend $15,000 on qualifying medical services and insurance premiums this year, you could subtract $9,750 from your taxable income through itemized deductions. Since this amount is less than the standard deduction for single taxpayers, you would be better off not deducting these expenses from your taxes.
You should be able to deduct health insurance premiums that exceed 7.5% of your AGI from your taxes if you maintain coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) after leaving your job. COBRA is a law that allows eligible employees to stay on employer-sponsored health plans for up to three years after getting fired or quitting.
If you continue coverage through COBRA, your former employer most likely will not continue to contribute toward your health insurance premium payments. Since you will have to pay your COBRA health insurance premiums in full, you can deduct them from your taxes like you would for an individual or family plan.
Similarly, you can include your Medicare premium as a medical expense among your itemized deductions for qualifying expenses over 7.5% of your AGI. This includes premiums for Medicare Parts B through D, Medicare Supplement insurance and, if you aren’t eligible for free coverage, Medicare Part A.
Is Long-Term Care Tax Deductible?
You can also deduct qualified long-term care services and long-term care insurance premiums from your taxes, although the amount of premiums you can deduct is limited depending on your age. See below for an overview of the maximum long-term care insurance deductions for every age range.
40 or under
41 to 50
51 to 60
61 to 70
71 or over
What Medical Expenses Are Tax Deductible?
In addition to insurance premiums, there are several other medical services you can deduct from your taxes if they collectively exceed 7.5% of your AGI. Some examples of deductible medical expenses include the following:
- Outpatient medical services
- Inpatient care in a hospital or nursing home
- Acupuncture treatments
- Weight-loss programs related to a disease diagnosed by a doctor
- Insulin and other prescription drugs
- Hearing aids, glasses or contacts, false teeth, guide dogs and durable medical equipment such as crutches or wheelchairs
- Transportation to a conference related to a chronic illness and other transportation related to essential medical care
Keep in mind that you can only deduct covered medical services that you paid for out of pocket. As a result, you cannot deduct expenses that were covered by your insurance company or that you were otherwise reimbursed for.
What Medical Expenses Aren’t Tax Deductible?
There are some medical expenses that you aren’t allowed to include as an itemized deduction on your tax return including the following:
- Funeral or burial expenses
- Nonprescription drugs
- Toothpaste and other toiletries
- Cosmetic products
- Trips or programs aimed at generally improving your health
- Most types of cosmetic surgery
- Nonprescription nicotine gum or nicotine patches