Are Medicare premiums tax deductible?

Introduction

If you're over the age of 65, Medicare is a way for you to get health insurance. The program provides coverage for hospital stays, prescription drugs, and other services. But you have to pay a premium each month to access these benefits. If you're wondering whether your premiums are tax-deductible, the answer is yes – but only if you meet certain requirements.


You might qualify to deduct your Medicare premiums.

You may be able to deduct your premiums if you itemize deductions, meet certain income and age requirements, and are either 65 years old or older yourself (65+), blind or disabled. And if the person paying your premium is your spouse who has retired, you can take a deduction for his or her premiums as well. To learn more about this deduction, visit our Tax Deductions for Seniors page for more info on what qualifies.

You can deduct Medicare premiums that you pay out of pocket.

If you're self-employed and pay Medicare taxes for yourself, your spouse, and dependents on Form 1040, Schedule SE (PDF), you can deduct the amount shown on line 27 of that form.

If you're an employee or retiree with income from work covered by Social Security and Medicare taxes paid by your employer, you can deduct these premiums as well — but only if they aren't already deducted from your pay.

Deductible Medicare premiums include:

  • The additional amount is paid by an individual who purchases coverage through the Health Insurance Marketplace (the "excess subsidy"). For 2017 tax returns filed in 2018, this is deductible if it's more than $700.

  • Part A of Medicare health insurance for people 65 years old or older (or disabled). The maximum amount that is eligible for deduction increased from $411 to $422 in 2019. You may also be able to deduct part B premiums if your income doesn't exceed $133,500 ($266,000 for married couples filing jointly).

The IRS adjusts the income limits for deduction every year.

You can't deduct the full amount of your Medicare premiums, but you can deduct a portion of them. The IRS adjusts the income limits for deduction every year.

The IRS adjusts the income limits for deduction every year. In 2019, if you're single and claim only one personal exemption, your modified adjusted gross income (MAGI) has to be less than $135,000 to claim a medical expense deduction on Schedule A (Form 1040). If you're married filing jointly and both spouses are age 65 or older as of December 31st in 2019, then MAGI has to be less than $320,000 before any medical expenses can be deducted. If only one spouse is 65 or older as of the end of 2019 and the other spouse isn't yet eligible for Medicare benefits because he/she turned 65 after June 30th in 2019 (or before March 1st, 2020), the MAGI has to be less than $160,000 before any medical expenses can be deducted from Form 1040's Schedule A line itemized deductions section.


How to deduct your Medicare premiums on your taxes.

  • Medicare Part B premiums. You can deduct the amount you pay in Medicare Part B premiums on your taxes.

  • Medicare Part D premiums. You can only deduct your out-of-pocket expenses for prescription drugs, not the monthly premium.

  • Medicare Advantage premiums. If you have supplemental coverage provided by a private insurer, you may be able to deduct any out-of-pocket costs that exceed $400 per month (excluding copays). The same applies if a private plan pays for part of your primary care doctor's services and other health care services—you're only allowed to claim those costs if they total over $400 per month and are considered medically necessary by your insurance company or employer's plan administrator.

  • Medicare Part A premiums: Only self-employed individuals who paid directly into their own retirement account may be able to take advantage of this deduction; otherwise, it's limited strictly to retired workers who receive Social Security benefits

How much are Medicare premiums?

Medicare premiums are not tax deductible, but your out-of-pocket medical expenses are. If you're paying for Medicare B, Part A—which covers inpatient hospital care and other services in a hospital setting—your premiums will be based on your income and your state of residence. If you don't qualify for Part A due to your income level or if you have only worked as an employee since 1966 (and thus do not qualify for a premium subsidy), then you'll pay the full cost of Part B coverage—about $135 per month in 2019.

For example, if you make $50,000 per year (in 2019) and live in California where there is no monthly Social Security benefit available with Part A coverage since there is no employer contribution to social security taxes deposited into the system by employers based on their employees' wages earned while working at their business locations within California; then all retirees who reside within this state pay 100% of their health insurance premium costs including Medicare B premiums themselves without any financial assistance from either private insurers or from government programs like Medicaid/CHIP programs offered through local non-profit organizations throughout each county seat townships. For more info, you can go to https://www.uhc.com/medicare/medicare-education/medicare-faq.html


If you need help paying for your Medicare premiums, you may be able to get some of it back when tax time rolls around.


If you’re paying for your own Medicare premiums, you can deduct them on your taxes. This is true whether you pay the premiums directly or if they are withheld from your paycheck. It doesn’t matter if the money came out of pre-tax dollars or after-tax dollars—the IRS allows tax deductions for both.

The amount of deduction depends on several factors: The first is whether or not you have other medical expenses that qualify for tax deductions. For example, if you paid a portion of the cost of prescription drugs with after-tax dollars this year, then only those costs that were covered by Medicare would be deductible (usually about half). You will also need to know how much income limits have been adjusted for any deductions when filing next year—this number varies every year based on inflation and other economic factors affecting health care costs nationwide over time.


Finally, there’s another thing to consider before claiming any deduction: if it's going towards something like Medicare premiums which may not occur again in future years, should Congress continue its efforts to dismantle this critical program through cuts & privatization schemes.*


Conclusion

Medicare is a social insurance program run by the federal government. It offers health care coverage for people who are 65 or older, disabled, or have end-stage renal disease (ESRD) and meet certain income requirements. If you pay premiums for Medicare Part A, B, or D, then your premiums may be tax deductible.


About Preferred Senior Benefits in Meridian, Idaho


Medicare is a federal program that provides healthcare coverage to individuals 65 years or older. Original Medicare coverage is broken into two parts—Part A and Part B—and is accepted by nearly every doctor and hospital in the country. Medicare Part A covers inpatient or hospital stays, while Part B covers outpatient or medical care. Together, Part A and B cover about 80% of the typical healthcare costs seniors face. This leaves a few significant gaps in coverage. Medicare Supplement (Medigap) and Medicare Advantage plans are policies designed to help extend coverage, lessen costs, and ultimately give beneficiaries peace of mind. If you or someone you know would like more information about how to enroll in Original Medicare or one of the Medicare Advantage plans, call now to speak with a licensed agent (208) 818-2523. We can’t wait to help you learn about your options.

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