Direct answer: If your business shows a net profit and, for a given month, you were not eligible for an employer-subsidized health plan (including one offered through your spouse's job), you can generally deduct the premiums you paid that month for medical, dental, vision and qualified long-term care insurance.
This page covers the tax side. For how to choose coverage when you work for yourself, see how self-employed people get health insurance in Florida.
The five tests at a glance
| Test | What the IRS requires | Where people go wrong |
|---|---|---|
| Self-employment income | Net profit on Schedule C or F, net earnings from self-employment as a partner, or W-2 wages from an S corporation in which you own more than 2% | Claiming the deduction in a year the business shows a loss |
| Plan established under the business | Schedule C/F filers: the policy can be in the business name or your own name. Partners: premiums reported as guaranteed payments on Schedule K-1. More-than-2% S-corp owners: premiums included as wages in box 1 of Form W-2 | An S-corp owner who pays premiums personally but never has them added to W-2 wages |
| No subsidized employer plan that month | You cannot use any month in which you were eligible for a subsidized plan through your own employer, your spouse's employer, or the employer of a dependent or an under-27 child, even if you declined it | Deducting a full year when a spouse's job offered coverage for part of it |
| Earned-income limit | The deduction cannot be more than the net profit of the business the plan is established under, after certain adjustments | Using one business's premiums against another business's profit |
| Premiums you actually paid | Only the amount you paid. If you had a Marketplace plan with advance premium tax credits, follow IRS Publication 974 | Deducting the full premium before the credit |
Which premiums count?
- Medical, dental and vision insurance for you, your spouse, your dependents, and a child under 27 at year end.
- Qualified long-term care insurance, up to the age-based limit the IRS sets each year.
- Medicare premiums you voluntarily pay for coverage in your name. The Form 7206 instructions allow them as long as the other tests are met.
Which months and amounts do not count?
- Any month you were eligible for a subsidized employer plan, as described in the table. The test applies month by month, so a spouse starting a job with benefits in July can leave only January through June deductible.
- Premiums paid with pre-tax money, or premiums someone else reimbursed.
- The part of a Marketplace premium covered by the premium tax credit.
What if my plan comes from HealthCare.gov with a premium tax credit?
This is the common case in Polk County. During 2026 Open Enrollment, 120,996 of the 126,521 Polk County residents who picked a Marketplace plan received advance premium tax credits (CMS 2026 OEP County-Level Public Use File). The deduction and the credit affect each other: the deduction lowers AGI, and a lower AGI can raise the credit. Publication 974 gives the method for working this out. Most tax software handles it. If your income is close to a credit boundary, have a tax professional run it.
How to claim it
- Total the eligible premiums by month, leaving out any month when a subsidized employer plan was available.
- Subtract any premium tax credit amounts, following Publication 974 if it applies.
- Figure the deduction on Form 7206, or on the worksheet in the Form 1040 instructions if you qualify to use it. Form 7206 is required if you had more than one source of self-employment income, file Form 2555, or are including long-term care premiums.
- Enter the result on Schedule 1 (Form 1040), line 17 (line number from the 2025 form).
Illustration (not tax advice)
A Lakeland sole proprietor has $60,000 of net profit and pays $450 a month after credits for a Marketplace plan all year. That is $5,400 in premiums, before any Publication 974 adjustment. If a spouse's employer had offered subsidized family coverage starting in July, only January through June, or $2,700, would be eligible. The figures are made up to show the monthly test. They are not a quote or an average.
Where an agent fits, and where a tax professional fits
David Huff is a licensed health insurance agent, not a tax preparer. He can help you pick coverage, keep your HealthCare.gov income estimate current, and get the Form 1095-A your tax preparer will need. Ask a CPA or enrolled agent to prepare Form 7206 and the credit reconciliation.
Call (863) 640-3102 Bring last year's return, this year's profit to date, and your current plan.
Related reading
- Self-employed health insurance in Lakeland and Polk County
- Self-employed coverage hub
- What counts as income for Marketplace plans
- Do I have to pay back the premium tax credit?
- How Medicare works with an HSA
Common questions
Can I take the self-employed health insurance deduction if my spouse's employer offers coverage?
Not for any month you were eligible for a subsidized plan through your spouse's employer, even if you declined it. The IRS applies this test month by month.
Can I deduct Marketplace premiums if I get a premium tax credit?
Yes, but only the part of the premium you paid yourself. Because the deduction and the credit affect each other, the IRS explains how to figure both in Publication 974.
Does the self-employed health insurance deduction lower self-employment tax?
No. It lowers adjusted gross income and income tax, but it does not reduce self-employment tax.
Can I deduct Medicare premiums as a self-employed person?
Yes, if the other tests are met. The IRS allows Medicare premiums you voluntarily pay for coverage in your name to count toward the deduction.
Where do I claim the self-employed health insurance deduction?
On Schedule 1 (Form 1040), line 17. Use Form 7206 or the worksheet in the Form 1040 instructions to figure the amount.