Who Qualifies?

You are eligible for this tax deduction if any of the following apply to you:

• You were self-employed and had a net profit for the year, as reported on Schedule C, C-EZ, or F.
• You were a general partner with net earnings from self-employment as reported on Schedule K-1 (Form 1065).
• You were a limited partner receiving guaranteed payments.
• You received wages from an S corporation in which you were a more than 2% shareholder.

You may qualify for the deduction whether you paid the premiums yourself or your partnership or S corporation paid them for you and you included the premiums in your gross income.

Establish the Plan Under Your Trade or Business

In order to be deductible, the health insurance plan must be established under your trade or business.  The plan can still cover you, your spouse and dependents, but it must be set up under your business name.  You should take this into consideration when you first take out health insurance coverage, or if you already have a personal health insurance policy, you may want to see how you could change it so that it is set up under your business.

If You Have Medical Insurance Coverage Through an Employer

If you are self-employed part-time and also work as an employee, you may have medical insurance coverage through your employer.  Or you may be covered by medical insurance provided by your spouse’s employer.  In this case, you cannot take the deduction for self-employed health insurance for any month in which you were eligible to participate in a subsidized health care plan maintained by your or your spouse’s employer.  Reference here is made to months of coverage, so you still may be able to claim the self-employed health insurance deduction for the portion of the year in which you are not covered by an employer-subsidized plan.  Health insurance benefits paid for you by your employer may be shown in box 14 of your W-2 Form.