Is our part of premium that we paid on Covered CA health insurance deductible as medical expense?

[kptx08]

In December 2022, we pre-paid the January 2023 premium out-of-pocket for a health insurance plan through Covered California. Basically, the premium was $2,600 and the Federal & California financial assistance was $1,500 so we paid $1,100 for our portion of the January 2023 premium.

I understand that the Advanced Premium Tax Credit (APTC) was applied to lower our monthly bill.

Question: Can we deduct our portion of the premium that we paid ($1,100) for out-of-pocket in December 2022 on our CY2022 taxes? Would this be in TurboTax under Federal Taxes/Deductions & Credits/Medical insurance premiums or somewhere else?

[rjs]

I can't find any definitive rules about your specific situation, but I would say that you should not deduct the premium payment on your 2022 tax return. The reason is that the premium you paid in December 2022 for January 2023 is going to be included in your Form 1095-A for 2023. When you enter that 1095-A in your 2023 tax return, your portion of the payment for January is going to automatically be included in your medical expenses on Schedule A in your 2023 tax return. You obviously cannot deduct it in both years, and there is no way to avoid deducting it in 2023. Also, the actual net amount that you pay yourself will be adjusted, up or down, based on the totals for the year on the 1095-A and the income on your 2023 tax return.

Keep in mind that only medical expenses in excess of 7.5% of your Adjusted Gross Income (AGI) are deductible. (Enter the full amount that you paid in TurboTax. TurboTax will subtract 7.5% of your AGI.) In addition, medical expenses are an itemized deduction. They will not reduce your tax or increase your refund unless your total itemized deductions are more than your standard deduction. So it's possible that your out-of-pocket premium payments are not going to make any difference in your tax or your refund, in either year.

[kptx08]

Hi rjs,

Thank you for taking the time to consider my question and reply! I appreciate your help.