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The TurboTax Blog > Affordable Care Act (ACA) > When Can You Claim a Tax Deduction for Health Insurance?

When Can You Claim a Tax Deduction for Health Insurance?

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Claiming medical and dental tax deductions can lead to big savings – if you had major out-of-pocket expenses or your income was lower than expected.

Under the Affordable Care Act, you can only deduct the amount of your total medical and dental expenses that exceed 10% of your annual adjusted gross income or 7.5% if you or your spouse is 65 or older.  Self-employed individuals can deduct 100% of medical and dental costs, including premiums.

The IRS allows deductions for out-of-pocket expenses for medical, dental and vision care, prescription drugs and insulin, wellness programs, travel costs for medical care and much more. You must have paid for the expenses in the taxable year.

In some cases, you can deduct insurance premiums for policies that cover medical care and some qualifying long-term care insurance. But you can’t deduct the premium amount paid by your employer or an advanced tax credit from the Health Insurance Marketplace.

Be aware, though, that there’s no double dipping. You can’t deduct amounts paid into tax-free health saving accounts (HSA) and flexible spending accounts (FSA).  You also can’t claim a deduction if the bill was paid by your insurer.

Deducting medical expenses can lower your modified adjusted gross income, which can protect you from having to pay back tax credits when filing your taxes because you lost income due to medical expenses.

For a full list of eligible deductions, see IRS Publication 502, Medical and Dental Expenses and itemize the deductions on Form 1040, Schedule A.


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