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gerrylewis
Returning Member

Self-employed health insurance deduction for retiree

Does Sched-1, Line-16, health insurance deduction apply if the person pays full price for retiree health insurance from a former employer? Retired 3 years ago and now back with a consulting firm as non-employee consultant. She is no longer "employed" and the health plan is not subsidized.

I'm concerned about this "The insurance plan must be established under your business." from the instructions. (Underlines are mine)

Also this: "But if you also were eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2019, amounts paid for health insurance coverage for that month can't be used to figure the deduction."

Thanks.

5 Replies
ColeenD3
Expert Alumni

Self-employed health insurance deduction for retiree

You have stated that the plan is not subsidized. I am assuming she was not eligible to participate in the subsidized plan.

 

The bottom line that that the second condition takes precedence. If she was eligible, then the balance of the statement holds true.

 

"But if you also were eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2019, amounts paid for health insurance coverage for that month can't be used to figure the deduction."

Bsch4477
Level 15

Self-employed health insurance deduction for retiree

Policy requirements: The insurance plan must be established under your business.

For self-employed individuals filing a Schedule C, C-EZ or F, the policy can be either in the name of the business or in the name of the individual. 

 

So if the policy is in her name there’s no problem.  If she is paying for an unsubsidized premium she meets the qualifications for the deduction.

You do not post if she has self employment income which she is required to have for that deduction. 

gerrylewis
Returning Member

Self-employed health insurance deduction for retiree

Yes, self-employed - Nonemployee Compensation in Box 7 of 1099-Misc. Forgot that little detail.

gerrylewis
Returning Member

Self-employed health insurance deduction for retiree

I'm still troubled by the "subsidized health plan" vs. "employer sponsored coverage". Even the TurboTax TaxTips page for healthcare titled "Deducting Health Insurance Premiums If You're Self-Employed" has a link in a paragraph,  employer-subsidized health plan,  that takes you to another page titled "What is Employer Sponsored Coverage".

Today she received a 1095-C (Employer Provided Health Insurance and Coverage) with a Code 1G (The company is self-insured) in the box 14's but 0.00 in Box 15's. As a retiree she pays full price for the coverage so I wouldn't say it's subsidized, but the 1095-C indicates (to me) that it's sponsored.

So still scratching my head.

Bsch4477
Level 15

Self-employed health insurance deduction for retiree

Maybe the answer is that since she is paying for health coverage through her employer’s plan she is being subsidized since her premium would likely be higher if she were not able to take advantage of the employer’s group rate. 

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