Are Medical Premiums Tax-Deductible? What Counts in 2026 and When You Can Claim Them

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Yes — medical insurance premiums can be tax deductible, but only in specific situations that depend on how you’re insured, how you paid for coverage and whether you itemize or qualify for special rules like self-employment. This guide breaks down exactly when premiums count, when they don’t and how to claim them on your 2026 tax return without overcomplicating the rules.

When Medical Insurance Premiums Are Tax-Deductible

Whether your premiums qualify as tax-deductible comes down to who paid them, whether taxes were already avoided and which deduction path you’re using.

W-2 Employees With Employer-Sponsored Insurance

Most employees cannot deduct their health insurance premiums because the money usually comes out of paychecks before taxes through a Section 125 cafeteria plan. Since those dollars were never taxed in the first place, the IRS doesn’t allow a second tax break on the same expense.

However, premiums may qualify if:

• You paid for coverage using after-tax money.
• You purchased COBRA or an ACA plan without subsidies.
• You paid premiums for a non-dependent partner or family member.

Even then, you must itemize deductions and exceed the 7.5% of AGI medical expense threshold to see any benefit.

Self-Employed Individuals

If you’re self-employed, this is where the rules work in your favor.

Per IRS rules, you can often deduct 100% of your health insurance premiums “above the line,”meaning you don’t need to itemize. The deduction reduces your adjusted gross income directly.

This applies to:

• Sole proprietors
• Freelancers and gig workers
• Partners and eligible S-corp owners

Premiums can include medical, dental, vision and qualifying long-term care insurance.

Two key requirements:

• You must show a net profit for the year.
• You cannot be eligible for other employer coverage, such as through a spouse.

This is one of the few ways health insurance premiums bypass the 7.5% AGI hurdle entirely.

Marketplace (ACA) Plan Buyers

If you buy insurance through Healthcare.gov or a state exchange, only the portion you actually paid out of pocket counts. Any advance premium tax credit subsidy reduces the amount eligible for deduction.

There’s also a planning wrinkle: Your final premium deduction interacts with your modified adjusted gross income, which can affect how much subsidy you ultimately qualify for. In other words, if your deduction for your insurance premium is high, you might lower your income to the point that you’re no longer entitled to the same subsidy. As a result, many filers will discover small differences when they file.

Retirees and Medicare Enrollees

Medicare premiums may qualify as medical expenses if you itemize and exceed the AGI threshold, per Medicare.gov. This includes:

• Medicare Part B premiums
• Medicare Part D premiums
• The cost of Medigap supplemental policies

For retirees on fixed incomes, stacking premiums with other medical costs can sometimes push itemized deductions over the standard deduction line, especially in years with elevated healthcare spending.

In Summary

Medical insurance premiums may be deductible if you’re self-employed or if you itemize medical expenses that exceed 7.5% of your AGI. Pre-tax and subsidized premiums generally don’t qualify.

The 7.5% of AGI Rule — and Why It Stops Most Deductions

This rule is the biggest reason many taxpayers never see a medical deduction.

How the Medical Expense Threshold Works

You can only deduct medical expenses that exceed 7.5% of your adjusted gross income. Only the amount above the threshold counts for the deduction.

Example:

• AGI: $60,000
• 7.5% threshold: $4,500
• Total medical expenses: $6,000
• Deductible portion: $1,500

Why the Standard Deduction Changes the Math

Even if you exceed the 7.5% threshold, itemizing only makes sense if your total itemized deductions beat the standard deduction.

Since the Tax Cuts and Jobs Act raised the standard deduction, only about one in ten filers itemize in most recent tax years, according to IRS statistics. That doesn’t mean premiums “aren’t deductible.” It simply means they often aren’t high enough to produce a real tax benefit for average households, since the standard deduction itself is now relatively high.

What Doesn’t Qualify — and Common Mistakes To Avoid

This is where taxpayers often trip up.

Pre-Tax, Reimbursed or Subsidized Premiums

You generally can’t deduct:

• Premiums paid through employer payroll deductions
• Employer-paid insurance
• Premiums reduced by ACA subsidies

Those dollars already received tax benefits.

When Health Insurance Premiums Aren’t Deductible

The IRS disallows deductions if:

• Premiums were paid using HSA or FSA funds
• Expenses were reimbursed by insurance or an employer

Claiming both creates audit risk.

Coverage With Special Rules

• Long-term care insurance: Deductible within age-based limits
• Dental and vision: Often deductible as medical expenses
• Dependents: Premiums may qualify if you legally claim the dependent

Think of these as IRS red flags rather than technical loopholes.

How To Claim the Deduction — and When It’s Worth the Effort

Eligibility only matters if the numbers actually work in your favor.

Which Forms To Use?

• Self-employed:
  • Form 7206
  • Schedule 1 (Form 1040)
• Itemized filers:
  • Schedule A
  • Report total medical expenses above the AGI threshold

Maintain premium statements, bank statements and insurer invoices.

When Itemizing Makes Sense

Itemizing becomes more attractive when:

• You had major medical events.
• You paid high premiums plus large out-of-pocket costs.
• You experienced a transition year such as retirement, self-employment or COBRA coverage.

In stable years with modest healthcare spending, the standard deduction usually wins.

Other Ways To Save if Premiums Aren’t Deductible

If premiums don’t qualify, tax planning still matters:

• HSAs: Triple tax advantage for eligible high-deductible plans
• FSAs: Useful for predictable medical spending
• Budget optimization: Matching coverage levels to real usage

Quick Takeaways for 2026 Filers

Medical premiums can be deductible, but only when the structure aligns with IRS rules. Start by identifying your taxpayer type. Self-employed filers often benefit the most. Employees usually need unusually high medical costs to see value.

If premiums don’t qualify, focus on HSAs and smart coverage planning instead. A few minutes of upfront analysis can prevent leaving legitimate deductions on the table.

Data is accurate as of Jan. 22, 2026 and is subject to change.

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