Health insurance premiums

[osdowns]

I am a little confused about whether or not I can deduct our insurance premiums from 2020. Our employment and insurance history is a bit confusing, so bear with me.

My husband worked a consulting job from January to April as a 1099 employee, received unemployment from May to November, and then worked a barely part time consulting position as a W-2 employee for Nov and December.

In January and Feb we had subsidized COBRA premium. From March to August we paid 100% of our COBRA premium, and then switched over to a Med Share plan of which we pay 100% of the premium.

My understanding is that as long as we are paying more than 50% of our premium, aren't on a non-qualifying insurance programs (i.e. Medicaid, Medicare, etc.) and receive unemployment, then I can deduct for those months. Is that right? Does the Med Share plan count toward that? I believe it is a state qualified plan. If I'm right, I should be able to deduct our insurance premiums from March to November.

Help! Thanks everyone.

[Opus 17]

You can deduct any medical insurance premiums that you pay out of pocket, there is no 50% limitation. The most common limitation is that when you are an employee paying for employer sponsored coverage, those premiums are deducted from your paycheck on a pre-tax basis and you can’t list them as an itemized deduction again, because you can’t subtract some thing from your taxable income that is not in your taxable income in the first place.  But if you are paying the premiums out of pocket with your own after-tax dollars, they are a deductible medical expense, even if you are paying a reduced premium because someone else is helping to pay such as the previous employer. (Although you only deduct what you pay, not the total premium.)

However, Christian ministry medi-share is not deductible because it is not technically health insurance under federal law.

[osdowns]

Thank you! Is it more beneficial to deduct the COBRA premium as a "business expense" for the months that he was a 1099 employee, or just use all of it as a health care deduction?

[osdowns]

Also, do I use the criteria in my original message to qualify for the HCTC?

[Opus 17]

I don't believe you qualify for the Premium Tax Credit (ObamaCare).  The Medi-share is not eligible, and I don't believe COBRA coverage is eligible either, although another expert should review that.

The HCTC is something I have never heard of before.

https://www.irs.gov/credits-deductions/individuals/hctc

COBRA coverage is eligible for the HCTC.  There are a number of other eligibility requirements, make sure you qualify.  I don't think Medi-Share qualifies for this credit either. 

COBRA coverage is not eligible for the self-employed health insurance deduction.  

"When you're self-employed, the Internal Revenue Service does allow you to write off qualifying medical insurance premiums. However, to qualify, the insurance plan must be created under your trade or business name. COBRA coverage continues your existing coverage under your previous employer's plan. Therefore, because you didn't create the policy under your self-employed business name, you can't include the COBRA insurance premiums you pay as part of the self-employed medical insurance deduction." https://finance.zacks.com/can-cobra-qualify-selfemployed-health-insurance-deduction-10199.html

If you qualify for the HCTC, that will probably give you the lowest overall income tax, since the itemized deduction for medical expenses is subject to the 7.5% threshold.  

@Hal_Al  @DoninGA anything I missed or got wrong?