Self Employed Helth Care Deduction If Retired and Former Employer Provide Funding to an HRA

[mjl33]

My wife is self-employed and earns a profit on her business. We are both retired from our previous jobs and over 65 years old and on Medicare. My former employer provides and funds a Health Reimbursement Account for each of us that we use to purchase Supplemental Insurance. Can we still take the deduction for self-employed health care premiums (Medicare part B and D) or is she disqualified based on what I copied below from the Form 7206 Instructions?  It does not specifically mention former employer. Thanks.

Other coverage.

You can’t take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you didn’t actually participate. In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2023, don’t use amounts paid for coverage for that month to figure the deduction.

These rules are applied separately to plans that provide long-term care insurance and plans that don’t provide long-term care insurance. However, any medical insurance payments not deductible on Schedule 1 (Form 1040), line 17, can be included as medical expenses on Schedule A (Form 1040) if you itemize deductions.

[Vanessa A · Accepted solution]

Can we still take the deduction for self-employed health care premiums (Medicare part B and D) or is she disqualified based on what I copied below from the Form 7206 Instructions?  The fact that your employer provides and funds and HSA means you are NOT able to deduct any of the premiums covered by the HSA.  Since they are funding the HSA, you are not paying for the premiums, your previous employer is paying for the premiums.  Also, even if you were funding the HSA, you would not be able to claim the premiums paid with the HSA as a self-employed health insurance deduction as you are already getting a tax break on the HSA contributions not being taxed. 

Basically, no double dipping.  In general, if you get a tax break or are not paying for something, you cannot deduct it.