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Is an overstated ACA Premium Tax Credit tax deductible?

Help please. My wife his a sole proprietor and I am retired. I am on medicare and my wife and sons are on the ACA. We underestimated our income for 2023 due to large capital gains and now I have to paid back about $7,000 to the ACA. I'm cool with that.  I took my medicare premiums plus the premiums for the ACA policy as a Self-Employed Health Care deduction, which more than offsets all of our SP income. We are doing an itemized deduction this year so we are writing off medical. 

 

My question is do I add the ACA premiums tax credit that I am paying back ($7,000) to the Self-Employed Health Care deduction? I don't see where else it gets picked up as a deduction.

 

Thank you in advance for any insight you can provide.

 

John

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2 Replies
MinhT1
Employee Tax Expert

Is an overstated ACA Premium Tax Credit tax deductible?

Yes, you can add the repayment of the tax premium advance to your self-employed health insurance deduction as the repayment adds to your premium cost. The self-employed Health insurance deduction is limited to your self-employed business income.

 

But you can't use the premiums used for the self-employed health insurance deduction as medical expenses if you itemize. It would be double-dipping.

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Is an overstated ACA Premium Tax Credit tax deductible?

Thank you for the quick response. 

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