Can I Deduct Health Insurance Premiums From My Taxes?

You can deduct health insurance premiums from your taxes, but the path depends on how you pay for coverage. If your premiums come out of your paycheck pre-tax, you’ve already received the deduction and there’s nothing to claim. If you’re self-employed, you get an above-the-line deduction that reduces your adjusted gross income directly. If you pay premiums with after-tax dollars and neither of those applies, you can itemize on Schedule A, but only the portion of your total medical expenses that exceeds 7.5% of your AGI counts, and your itemized deductions still have to beat the standard deduction to matter.

Pre-Tax Premiums Through Your Employer

Most Americans with job-based coverage pay their share of premiums through a cafeteria plan (sometimes called a Section 125 plan), which pulls the money out of each paycheck before federal income tax, Social Security tax, and Medicare tax are calculated.¹ The tax benefit is baked in. You cannot claim it again on your return.

Check your pay stub. If your premium deduction is listed as pre-tax, don’t put it on Schedule A. The portion your employer pays is excluded from your gross income entirely.² Box 12, Code DD on your W-2 shows the total cost of employer-sponsored coverage, but that number is informational and does not affect what you owe.³ Claiming a pre-tax premium a second time is double-dipping, and it’s one of the more common ways to draw an accuracy-related penalty.

The Self-Employed Health Insurance Deduction

Self-employed people get the best treatment available. Sole proprietors, partners, LLC members, and shareholders who own more than 2% of an S corporation can deduct health insurance premiums on Schedule 1 of Form 1040, reducing AGI before the question of itemizing ever comes up.⁴ There is no 7.5% floor. The standard deduction is irrelevant. You get the deduction whether you itemize or not.

Eligible premiums cover medical, dental, and vision insurance, plus qualified long-term care premiums (subject to the age-based caps below), for you, your spouse, your dependents, and any of your children who were under age 27 at the end of the tax year, even if that child isn’t your dependent.⁴

Two Limits That Trip People Up

Your deduction can’t exceed the net earnings from the business that established the health plan.⁵ Business netted $30,000 and premiums were $18,000? You deduct $18,000. Business netted $10,000 and premiums were $18,000? You’re capped at $10,000. Anything left over can go on Schedule A with your other medical expenses if you itemize.⁴

The second limit is the one that surprises people. You cannot take the deduction for any month in which you were eligible to participate in a subsidized health plan through any employer, including your spouse’s employer or the employer of a dependent or under-27 child.⁶ Eligibility is what counts, not enrollment. If your spouse’s employer offered family coverage from March through December, you lose the deduction for those ten months even if you never signed up. Check your spouse’s plan options before claiming a full year.

Itemizing on Schedule A

When you pay premiums with after-tax dollars and neither of the paths above fits, you can include them with your other medical expenses on Schedule A. Only the amount that exceeds 7.5% of your adjusted gross income is deductible.⁷ Someone earning $80,000 needs more than $6,000 in medical costs before a single dollar becomes deductible.

Then your total itemized deductions still have to beat the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.⁸ Most W-2 employees never clear both hurdles. The people who do tend to be retirees, people managing serious chronic conditions, or anyone who had a major surgery or hospital stay during the year.

You can include premiums for yourself, your spouse, and your dependents. Any employer-paid or pre-tax portion has to be excluded from the calculation.⁷ COBRA premiums follow the same rule: on Schedule A subject to the 7.5% floor if you’re a W-2 employee, or eligible for the self-employed deduction if you qualify as self-employed, since COBRA is paid entirely by you rather than subsidized by an employer.

If You Buy Coverage Through the Marketplace

Marketplace coverage is worth calling out because the main tax benefit isn’t a deduction at all. It’s the Premium Tax Credit, a refundable credit that either lowers your tax bill or gets paid in advance to your insurer to reduce your monthly premium.⁹ For most enrollees, the credit is worth far more than any itemized premium deduction would be. You reconcile it on Form 8962 using the Form 1095-A your marketplace sends in January.

Self-employed people who buy marketplace coverage may qualify for both the credit and the self-employed health insurance deduction. The two interact circularly: the deduction lowers AGI, which raises the credit, which reduces the premium you paid, which reduces the deduction. Publication 974 provides both a simplified method and an iterative method for working it out, and the combined benefit cannot exceed your total enrollment premiums.¹⁰ Tax software handles it automatically.

Medicare Premiums

Medicare premiums count as qualified medical expenses. Part B, Part D, and Part C (Medicare Advantage) premiums all qualify.⁷ Part A premiums are deductible only if you aren’t entitled to Part A through Social Security and pay voluntarily, which is uncommon. If your income triggers the IRMAA surcharge on Parts B or D, the surcharge counts too.

For most retirees these premiums go on Schedule A and face the 7.5% AGI floor. A self-employed retiree with qualifying business income can instead run Medicare premiums through the self-employed health insurance deduction and skip the floor entirely.

Long-Term Care Premium Caps

Qualified long-term care insurance premiums are deductible, but only up to an age-based cap the IRS adjusts each year.⁷ For 2026, the maximum deductible amount per person is:¹¹

Age 40 or under: $910
Age 41 through 50: $1,710
Age 51 through 60: $3,230
Age 61 through 70: $8,660
Age 71 or older: $10,950

The caps apply whether you’re itemizing or taking the self-employed deduction. A 62-year-old paying $10,000 in long-term care premiums can only count $8,660. The limit is per person, so a married couple with separate policies gets separate caps based on their individual ages.

Premiums That Don’t Qualify

Not every insurance premium with a health-sounding purpose is deductible. The IRS excludes:¹²

Life insurance policies
Disability or lost-earnings policies, since coverage that pays a set amount when you can’t work isn’t medical care
Accidental death or dismemberment policies
Fixed-benefit hospitalization policies that pay a flat weekly amount rather than covering actual medical costs
The medical portion of car insurance when it isn’t stated separately on the policy

Retired public safety officers who used tax-free retirement plan distributions to pay premiums can’t also deduct those same premiums as self-employed health insurance, since the money was already paid with excluded income.⁴

Records to Keep and Penalties to Avoid

You don’t send proof of coverage with your return, but keep the paper trail in case the IRS asks. Insurance cards, premium invoices, explanation-of-benefits statements, and any Form 1095 you receive (1095-A for marketplace, 1095-B from an insurer, 1095-C from an employer) should all go in the file.¹³ If you’re self-employed, also note your spouse’s employer coverage options for each month, since the no-other-coverage rule is evaluated month by month.

An underpayment caused by negligence or disregard of the rules carries an accuracy-related penalty of 20% of the underpaid tax.¹⁴ The mistakes that most often trigger it: claiming pre-tax premiums a second time on Schedule A, taking the self-employed deduction for months when a spouse’s employer plan was available, and deducting policies that don’t qualify.

1
Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
2
Office of the Law Revision Counsel. 26 U.S. Code 106 – Contributions by Employer to Accident and Health Plans
3
Internal Revenue Service. Reporting Employer-Provided Health Coverage on Form W-2
4
Internal Revenue Service. Instructions for Form 7206 – Self-Employed Health Insurance Deduction
5
Office of the Law Revision Counsel. 26 U.S.C. 162 – Trade or Business Expenses
6
Internal Revenue Service. Form 7206 – Self-Employed Health Insurance Deduction
7
Office of the Law Revision Counsel. 26 U.S.C. 213 – Medical, Dental, Etc., Expenses
8
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
9
Office of the Law Revision Counsel. 26 U.S.C. 36B – Refundable Credit for Coverage Under a Qualified Health Plan
10
Internal Revenue Service. Publication 974 – Premium Tax Credit (PTC)
11
Internal Revenue Service. Notice 2025-67
12
Internal Revenue Service. Publication 502 – Medical and Dental Expenses
13
Internal Revenue Service. Gathering Your Health Coverage Documentation for the Tax Filing Season
14
Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments