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Are Health Insurance Premiums Tax Deductible?

are-healht-insurance-premiums-tax-deductible

ANSWER:

Health insurance premiums are tax deductible under certain conditions.

More Info: Health insurance premiums are tax deductible in some instances and not in others. In addition, some group healthcare plans may limit the deductions to the part of the deductible that covers medical services.  However, if you pay for your health insurance out-of-pocket and you do not take any kind of tax break, then your healthcare premiums are tax deductible.

Group Plans

The group plan offered today by many employers can be paid for with pre-tax dollars.  This type of premium is not tax deductible.  You cannot get a tax break twice on the same dollars.

Medicare

Only voluntary Medicare plans are tax deductible.  Medicare Part A is only deductible if you are not covered by Social Security as in the case of government employees covered by a pension plan. Medicare Part B (supplemental medical insurance) and Medicare Part D (voluntary prescription drug insurance) premiums are deductible.

Long-term Care

Long-term care premiums are tax deductible if your policy is non-qualified.  The amount deductible each year depends on how old you are and if you and your spouse both have long-term care insurance, you may each deduct the age-determined amount.

Self-Employed

Out-of-pocket healthcare premiums are tax deductible if you are self-employed.  The deduction is taken on Form 1040, line 29,

College Tuition Healthcare Premiums

Often a healthcare premium is included in your child’s college tuition.  If this is the case, then it is tax deductible if separately stated.

Affordable Care Act

Small businesses with fewer than 25 employees are currently eligible for tax credits worth up to 35% of their contributions for employee health care.  Nonprofits are eligible for up to 25%. This amount will rise in 2015 to 50% for eligible small businesses and 35% for nonprofits.

 

Resources

“Are My Health Insurance Premiums Deductible?  – TurboTax® Software Support.” TurboTax® Tax Preparation Software, FREE Tax Filing, Efile Taxes, Income Tax Returns. N.p., n.d. Web. 10 Oct. 2012. <http://turbotax.intuit.com/support/iq/Medical/Are-My-Health-Insurance-Premiums-Deductible–/GEN83731.html>.

“Can I Deduct Health Insurance Premiums & Healthcare Expenses on Taxes?.” Money Crashers – Personal Finance Blog & Guide to Financial Fitness. N.p., n.d. Web. 10 Oct. 2012. <http://www.moneycrashers.com/deduct-health-insurance-premiums-expenses/>.

“Small Employer Tax Credits  | HealthCare.gov.” HealthCare.gov. N.p., n.d. Web. 10 Oct. 2012. <http://www.healthcare.gov/law/features/employers/small-employer-tax-credit/index.html>.

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