skyborned
Returning Member

Are Health Coverage Tax Credit (HCTC) premiums deductible?

My wife qualified for the Health Coverage Tax Credit, which pays 72.5 percent of our insurance premiums. We didn't get the advance HCTC payments, so we paid the whole thing out of pocket and are filing for reimbursement for 2018. I know the 72.5 percent is not tax-deductible. But what about the remaining 27.5 percent (the portion of the premiums that we paid out of pocket)? Can we deduct it, and where would we deduct it in Turbotax (under medical insurance premiums?)?

AJ
Level 6

Get your taxes done using TurboTax

The health insurance premiums, which you pay using after-tax dollars that are not reimbursed, should be deductible as Medical Expenses/Insurance Premiums. Numbers would transfer over to Schedule A.  However, that deduction won't have value to you on your federal return unless your total medical expenses exceed 7.5% of your AGI and your total itemized deductions exceed your standard deduction.  Some states provide income tax benefits for health insurance regardless of itemizing or not at the federal level.  (Missouri provides such a health insurance adjustment to income taxed by the state. You will have to check for your state.)