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New Member

federal health insurance

I retired under disability; I am 57. I used federal health benefit last year.  I understand that the premium that was paid by government is no longer tax free and I have to pay taxes on it; is this correct? If so, I assume I can itemize the federal health insurance premium I paid; please verify.  Thanks.

3 Replies
Level 15

federal health insurance

I think you may have heard wrong   ...   if you had ACA  health insurance and got a form 1095-A to report on the return then the change was that if you got too much advance credit you no longer had to pay any of it back on the form 8962.  This did not change the fact that the government paid the premium so nothing changed in regards to the Sch A deductions. 

Level 15

federal health insurance

It is not really clear from your information how you are paying for your health insurance.   If you paid for it out of pocket, then the out of pocket amount can be entered as a medical expense.   It is very hard to have enough medical expenses to make any difference on your tax return.  The medical expenses have to meet a very tough threshold, and you also need enough other itemized deductions to exceed your standard deduction.



The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical (including dental, vision, etc.)  expenses that will count toward itemization is the amount that is OVER 7.5% of your adjusted gross income. You should only enter the amount that you paid in 2020—do not include any amounts that were covered by insurance or that are still outstanding.  Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.

To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expense






Are you saying that you were receiving health insurance from the marketplace--aka Obamacare?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
New Member

federal health insurance

Thanks for response.  Here is more clarification: I have not received any of the forms you mentioned.  We had a very expensive health insurance for the family for a few years.  The first year I retired under disability, I postponed paying my health benefits since the process of approval for disability took about a year and I received only little money from gov until it was approved. Last year government deducted two years of health insurance premium from my pension; it became 66% of my pension, much more than 7.5%.  Last year I also got divorced and now I have to file as a single filer with no dependent; my spouse has the custody. So, would you please elaborate on your answer with this given background.  Thanks.


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