Are Medicare Part B and D Premiums Tax Deductible?

Yes, Medicare Part B and Part D premiums are tax deductible as qualified medical expenses under federal tax law.¹² How you actually claim the deduction depends on your situation. Most retirees have to itemize on Schedule A and clear a 7.5% income floor before a single dollar counts. Self-employed taxpayers get a much better deal: an above-the-line deduction with no floor and no need to itemize. For reference, the standard Part B premium for 2026 is $202.90 per month, meaning a married couple both enrolled will pay close to $4,870 in Part B premiums alone before Part D or any surcharges.³

What Counts as a Deductible Medicare Cost

The IRS treats several Medicare-related payments as qualified medical expenses:

Part B premiums, which the statute specifically names as amounts paid for medical care insurance.¹
Part D prescription drug premiums, confirmed as deductible in IRS Publication 502.²
IRMAA surcharges on Part B and Part D, because they are part of your total Medicare premium.⁴
Medicare Advantage (Part C) premiums, under the same rules that apply to other health insurance.
Medigap supplemental policy premiums.
Part A premiums, if you’re one of the few who owes one because you didn’t earn 40 quarters of Social Security credits.⁵

Premiums that Social Security withholds from your monthly benefit still count as paid by you. They appear on Form SSA-1099 each January.⁶

The Itemized Deduction Route

If you’re not self-employed, the only path to deducting Medicare premiums runs through Schedule A of Form 1040.⁷ That means giving up the standard deduction, and two hurdles stand in the way.

The 7.5% AGI Floor

You can deduct only the portion of your total medical expenses that exceeds 7.5% of your adjusted gross income.² Everything under that floor does nothing for your taxes. On a $60,000 AGI, the first $4,500 of medical costs is dead weight; only the dollars above that go onto Schedule A.

The good news is the total isn’t just premiums. You aggregate every qualifying expense paid during the year: unreimbursed doctor visits, dental work, prescription copays, vision care, hearing aids, and long-term care costs. Medicare premiums pile onto that total, and the combined amount is what has to clear the floor.

The Standard Deduction Hurdle

Clearing the floor isn’t enough on its own. Your itemized deductions across every category — medical, state and local taxes, mortgage interest, charitable giving — have to beat the standard deduction before itemizing pays off. For 2026, the standard deduction is $16,100 for single filers and $32,200 for joint filers, with additional amounts for taxpayers 65 and older.⁸

That’s where most people’s deduction quietly disappears. A couple with $70,000 in AGI has to spend more than $5,250 before medical expenses start counting, and whatever gets past that floor still has to combine with their other deductions to top $32,200. Barring major surgery, extensive dental work, or ongoing treatment on top of the premiums, the standard deduction usually wins.

Higher-income beneficiaries paying full IRMAA surcharges have a better shot at itemizing, because their premiums are much larger. A couple at the top IRMAA tier can pay well over $15,000 a year in combined Medicare costs. The irony: those same taxpayers have higher AGI, which raises the floor.

The Self-Employed Deduction Is Far Better

If you have self-employment income, you can deduct Medicare Part B and Part D premiums as an above-the-line adjustment on Schedule 1 of Form 1040, reducing your AGI directly.⁹ No 7.5% floor. No need to itemize. You can take the standard deduction and still claim it. For a retiree who does consulting, freelance work, or runs a small business on the side, this is one of the most valuable deductions available.

The deduction covers premiums for you, your spouse, and your dependents, and IRMAA surcharges count. You calculate it on Form 7206 and report the result on Schedule 1, line 17.¹⁰

Who Qualifies

Two conditions have to be met. First, you need net self-employment income. The deduction can’t exceed your net profit from the business under which the insurance is established, after subtracting half of your self-employment tax.¹¹ If the business breaks even or runs a loss, this deduction is off the table. Any leftover premium can still go on Schedule A if you itemize.

Second, neither you nor your spouse can be eligible for a subsidized employer health plan. Eligible is the key word: if your spouse’s employer offers coverage you could join, the deduction is unavailable for the months that coverage is available, even if you don’t actually enroll.

Sole proprietors on Schedule C or F, partners in a partnership, and more-than-2% S-corporation shareholders all qualify, though S-corp owners have additional paperwork requirements around how the premiums flow through payroll.¹²¹³

Paying Medicare Premiums From an HSA

If you built up a Health Savings Account during your working years, you can use those funds to pay Medicare Part A, Part B, and Part D premiums tax-free once you turn 65.¹⁴ It isn’t technically a deduction, but the effect is similar: money that was never taxed going in comes out untaxed to pay the premium.

Two limits to know. Medigap premiums are specifically excluded, so an HSA withdrawal to pay a supplemental policy is taxable.¹⁴ And you can’t double up: premiums paid from an HSA can’t also be claimed as an itemized deduction on Schedule A.

One thing that catches people off guard: once you enroll in any part of Medicare, you can no longer contribute to an HSA, and the contribution limit drops to zero starting with the first month of coverage, including retroactive coverage.¹⁴ Existing balances stay usable; new contributions stop.

What Doesn’t Qualify

A few categories look deductible but aren’t.

Premiums already paid with pre-tax dollars. If an FSA or a pre-tax payroll arrangement covered the premium, you can’t deduct it again. The tax benefit was captured on the way in.

Late enrollment penalties. If you missed your initial Part B or Part D enrollment window and now carry a permanent surcharge, the penalty portion is generally not deductible. If a late penalty applies to you, ask a tax professional whether any portion of your total bill qualifies.

Premiums someone else paid. You can only deduct what you actually paid yourself. If a former employer’s retiree health plan pays your Medicare premiums, or someone else covers them, there’s no deductible expense on your return. Reimbursed premiums don’t count either.

Strategies That Can Push You Over the Threshold

Bunching medical expenses into a single year is the most common tactic for itemizers stuck near the floor. Scheduling elective procedures, dental work, or new glasses in the same year you’re already paying high premiums or unusual medical costs makes the combined total more likely to clear 7.5% of AGI. This doesn’t matter for the self-employed deduction, which has no floor.

For married couples where one spouse has much higher medical costs and lower income, filing separate returns can sometimes produce a larger deduction, because each spouse’s floor is calculated against their own AGI. Filing separately has real tradeoffs: it disqualifies you from several credits and can push you into worse brackets. Run the numbers both ways before deciding.

Keep every payment record. The IRS doesn’t require you to submit them with your return, but you’ll want them if a return is questioned.² Between the SSA-1099 for premiums withheld from Social Security and bank records for any premiums you paid directly, the paper trail is straightforward to assemble.

1
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
2
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
3
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
4
Social Security Administration (SSA). POMS HI 01101.031 – How IRMAA Is Calculated and How IRMAA Affects the Total Medicare Premium
5
Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment
6
Social Security Administration. Get Your Social Security Benefit Statement (SSA-1099)
7
Internal Revenue Service. Instructions for Schedule A (Form 1040) (2025)
8
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
9
Internal Revenue Service. Instructions for Form 7206 (2025) – Self-Employed Health Insurance Deduction
10
Internal Revenue Service. About Form 7206, Self-Employed Health Insurance Deduction
11
Internal Revenue Service. Self-Employed Health Insurance Deduction Case Study
12
Internal Revenue Service. S Corporation Compensation and Medical Insurance Issues
13
Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses
14
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans