Are Health Insurance Premiums Tax-Deductible?

 Are Health Insurance Premiums Tax-Deductible?

Maybe—if your healthcare costs are high enough

Health insurance is one of their most significant monthly expenses for some Americans, leading them to wonder what medical expenses are tax-deductible to reduce their bill. As healthcare prices rise, some consumers seek to reduce their costs through tax breaks on their monthly health insurance premiums. 

KEY TAKEAWAYS

• Health insurance premiums, the amount paid upfront in order to keep an insurance policy active, have been steadily increasing as the cost of healthcare has increased in the United States.2
• When the Affordable Care Act was passed by President Barack Obama in 2010, it allowed certain families to access premium tax credits on their health insurance plans.3
• If you are enrolled in an employer-sponsored plan and your premiums are made through a payroll deduction, they are likely made with pre-tax dollars, and you would not be allowed to claim a year-end tax deduction.
• You can deduct your health insurance premiums—and other healthcare costs—if your expenses exceed 7.5% of your adjusted gross income (AGI).4
• Self-employed individuals who meet certain criteria may be able to deduct their health insurance.
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