Are health insurance premiums tax deductible?

Navigating the world of taxes can sometimes feel like a maze, especially when it comes to understanding what you can and can’t deduct. Many taxpayers wonder if they can deduct health insurance premiums, in particular.

Deducting  health insurance premiums is possible in certain circumstances. In this post, we’ll unpack those situations and cover the basics, such as “What are health insurance premiums?” and “Are health insurance premiums deductible?” Plus, we’ll outline what is and isn’t deductible, along with a few examples to make sure you have a clear idea of what’s acceptable to deduct this tax year.

What are health insurance premiums?

Health insurance premiums are the up-front cost of having medical insurance. How you pay will depend on how you have access to the plan.

• If you’re getting a healthcare plan from your employer, your medical insurance premiums are usually deducted from your paycheck.
• If you’re getting health care coverage via the Health Insurance Marketplace, you must pay your first premium directly to the insurance company — not to the Health Insurance Marketplace.

For details on how these payments impact your taxes, including possible tax deductions, read on.

Are insurance premiums tax deductible?

Now that we’ve covered the health insurance premium definition, you’re probably curious if you can deduct them from your taxes.

Medical premiums can be tax-deductible in certain situations, which can lighten your tax load. The answer to “Are premiums for medical insurance tax deductible?” boils down to meeting specific criteria set by the Internal Revenue Service (IRS).

Does a health insurance premium include tax-deductible amounts?

Whether you can deduct health insurance premiums from your tax return also depends on a few factors. First, you’ll only be able to deduct premiums as medical expenses if you itemize deductions on your tax return, but not if you take the standard deduction. See more details at the bottom of this section.

Secondly, tax deductibility will depend on how you pay your premiums:

• If you pay for health insurance coverage before taxes are taken out of your employer’s paycheck, you can’t deduct your health insurance premiums. (Generally speaking, you can only claim qualified medical expenses as a post-tax deduction if they were paid for with after-tax earnings.)
• If you pay for health insurance coverage after taxes are taken out of your paycheck, you might qualify for the medical expense deduction.
• If your insurance is through your employer, you can only deduct these:
  • Amounts you paid with after-tax funds
  • Medical expenses exceeding 7.5% of your adjusted gross income (AGI) for 2024
• If you paid the premiums for a policy you obtained yourself, (such as through the marketplace) your health insurance premium is deductible when they are out-of-pocket costs.

You’ll need to review your paycheck stub to determine how much and when you pay for health insurance. Also, if you have pre-tax dollars withheld from your paycheck for your insurance, the amount on your W-2, Box 1 won’t include the cost of your health insurance. Wages shown in Box 1 are already adjusted for the cost of your health insurance.

Additional details about tax breaks and medical expenses: If you’re itemizing deductions vs claiming the standard deduction, the IRS generally allows you a medical expenses deduction if you have unreimbursed expenses that are more than 7.5% of your Adjusted Gross Income, (According to the Internal Revenue Service (IRS), a medical expense can include but aren’t limited to: payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatment affecting any structure or function of the body.) Learn more about the details of deducting medical expenses from your income to arrive at your taxable income.

What can and can’t be included as a health insurance premium deduction

If you’ve paid premiums or expenses with after-tax money, you may be able to deduct:

• Medical insurance
• Dental insurance
• Prescription medications
• Medicare A insurance (if you’re enrolled voluntarily and not as a Social Security recipient or government employee)
• Medicare B supplemental insurance
• Medicare D prescription insurance
• HMO membership

Also, you can include long-term care insurance, up to these limits for 2024:

• Age 40 or under: $470 maximum deduction
• Age 41 to 50: $880 maximum deduction
• Age 51 to 60: $1,760 maximum deduction
• Age 61 to 70: $4,710 maximum deduction
• Age 71 or older: $5,880 maximum deduction

If I can deduct health insurance premium costs, do these other expenses also count?

While some expenses may mention health insurance or seem related, not all will count as a health insurance premiums for medical expense deduction purposes. The following can’t be deducted:

• Any amount you entered in the self-employed health insurance deduction part of your return
• Disability insurance
• Life insurance
• Vehicle insurance (even if it covers medical care in the event of an accident)
• Medicare taxes
• Insurance you used to figure your health coverage care credit using Form 8889, Health Savings Accounts (HSAs)
• The incremental cost of adding a nondependent child under age 27 to your policy
• Medical costs reimbursed by any of these:
  • Insurance
  • Health savings accounts (HSAs)
  • Flexible spending accounts (FSAs)
  • Other tax-benefitted medical savings accounts

For more information on qualified medical expenses, visit Topic 502: Medical and Dental Expenses.

Can I deduct medical insurance premiums and other medical-related expenses?

If you’re wondering if there are other types of medical expenses that are tax-deductible other than premiums, you’re in luck. The answer is “yes.” And here we answer, “Can I claim medical expenses on my taxes?”

Get help navigating health insurance tax deductions

Whether you choose to file with a tax professional or file with H&R Block Online, you can rest assured that we’ll get you the biggest refund possible. We’ll help you spot how to maximize your tax savings through tax breaks and tax credits.