If you are self-employed and paid for health insurance coverage under a plan established through your business, you may be eligible to claim a deduction for the premiums paid.
Who Qualifies?
- Self-employed individuals, including sole proprietors, partners, and S corporation shareholders owning more than 2% of the company.
- The insurance plan must be established under your business and not through a spouse’s employer or another source.
What’s Deductible?
- Health insurance premiums for:
- Medical coverage
- Dental coverage
- Long-term care insurance
- Coverage may include:
- Yourself
- Your spouse
- Dependents
- Children under age 27 (even if not dependents)
Important Notes:
- The deduction cannot exceed your net self-employment income.
- Premiums paid through a pre-tax plan (e.g., cafeteria plan) are not deductible here.
- If you qualify for premium tax credits through the Marketplace, special rules may apply.
- The deduction is claimed "above the line", meaning you do not need to itemize to benefit.