Yes. Self-employed people who qualify are allowed to deduct 100% of their health insurance premiums (including dental and long-term care coverage) for themselves, their spouses, and their dependents. If your business earns no money or incurs a loss, you get no deduction.
You may be able to deduct medical, dental, and long-term care insurance premiums for yourself, your spouse, and your dependents if you or your jointly-filing spouse is self-employed.
There are two ways to do this; through the self-employed health insurance deduction or as an itemized deduction.
Self-employed health insurance deduction
- To get this deduction, your Schedule C must show a net profit.
- The deduction amount generally cannot exceed your net profit amount.
- If you (or your spouse if filing jointly) was eligible to participate in an employer's health plan during any given month – even if you declined the coverage – the premium you paid for that month cannot be claimed under this deduction.
- Health insurance premiums you paid for your child, even if you aren't claiming them as a dependent, is eligible for this deduction as long as your child was age 26 or younger at the end of 2020.
- The self-employed health insurance deduction shows up on Schedule 1, line 16.
Itemized deduction
- Any out-of-pocket premiums you couldn't claim under the self-employed health insurance deduction can be used as an itemized deduction instead.
- You can't deduct insurance premiums paid with pretax or tax-free dollars, nor can you claim any premiums you already claimed under the self-employed health insurance deduction.
- Itemized deductions show up on Schedule A.
After you enter your premiums in the self-employed business expense section (or the Affordable Care Act section if you received a 1095-A) we'll check to see if you qualify for either or both of these deductions.
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