Can I deduct my health insurance if my spouse has a plan at work?

Not for those months, and this is the rule most pages state wrongly. You cannot take the deduction for any month you were ELIGIBLE to participate in a subsidised plan through your spouse's employer, even if you never enrolled and paid for your own private policy. The test is eligibility, not participation. Form 7206, line 1.

Is the deduction the full amount of my premiums?

Only if your net earnings are large enough. Form 7206, line 14 takes the smaller of the premiums and your net earnings after subtracting half of self-employment tax and any SEP, SIMPLE or 401(k) contribution for the same business. A premium larger than that adjusted figure is deducted only up to it.

Does contributing to a SEP IRA reduce my health insurance deduction?

Yes, and that is line 9 of Form 7206. The retirement contribution comes off the same net earnings figure the health deduction is measured against, so the two compete for one ceiling. It only bites when your adjusted earnings are already below your premiums - with a high profit and a modest premium the limit is the premium and the SEP changes nothing. The calculator shows which limit is binding.

Can I deduct long-term care insurance premiums?

Yes, on line 2, but only up to an age-based cap per person: $480 at 40 or younger, $900 at 41 to 50, $1,800 at 51 to 60, $4,810 at 61 to 70, and $6,020 at 71 or older. If you are using long-term care premiums you must file Form 7206 rather than the shorter worksheet in the Form 1040 instructions.

Do I have to file Form 7206, or can I use the worksheet?

You may use the worksheet in the Form 1040 instructions unless any of three things apply: you had more than one source of income subject to self-employment tax, you file Form 2555 for foreign earned income, or you are using long-term care premiums. Any one of those makes Form 7206 mandatory. This calculator follows the form, so it covers all three.

Can I still take the deduction if I have an S corporation?

Yes, but the figure is different. If you own more than 2% of the S corporation, the premiums are reported as wages on your W-2 and the limit is measured against those Medicare wages rather than against business profit - line 11 instead of lines 4 to 10. The deduction is available against the wages, not against the corporate profit.

IRS Form 7206 · Verified

Self-Employed Health Insurance Deduction

What you can actually deduct for your own health cover — which is usually less than the premiums you paid, and sometimes nothing at all.

Prepared for the 2026 tax year.

The rules for the 2026 tax year are published during 2025 and 2026 — the adjusted figures first, the explaining publications as the year goes on — and the return they govern is filed in 2027.

The edition of Form 7206 in force today is the 2025 one. The form carries no indexed figures, so its lines are unchanged for 2026; the tax year it is filed for is 2026.

Health insurance premiums you paid this year

Enter the total you paid for the year

Medical, dental and vision cover for you, your spouse and your dependants. Take the figure from your own records, not from a pay stub — premiums withheld from a W-2 do not belong here.

Months you were eligible for a subsidised plan through an employer

Eligible, not enrolled. Count the employer of your spouse, of your dependants, or of a child under 27 — and count the month even if you never signed up. Those months come out of the deduction. This is the question that makes most people's figure differ from the premium they paid.

Net profit from the business the plan is under

Enter your net profit

Schedule C line 31 for a sole proprietor. If the plan is under an S corporation you own more than 2% of, use the S corporation switch below instead.

Paid into a SEP, SIMPLE or 401(k) for the same business

Form 7206 line 9. A retirement contribution and this deduction come out of the same net earnings figure, so they compete. Leave at zero if you contributed nothing or contributed under a different business.

More situations optional

Long-term care insurance premiums paid

Only a qualified long-term care contract counts. Deductible only up to an age-based cap per person, applied below.

Age of the person covered, at the end of the year

The cap is per person, so several covered people each get their own.

Total net profit from all your businesses

Form 7206 lines 5 and 6. When the plan sits under one business out of several, the net earnings limit is apportioned by that business's share of the total. Leave at zero if this is your only business.

S corporation: your Medicare wages (W-2 box 5)

Only if you own more than 2% of the S corporation and the premiums are reported as your wages. Filling this in switches the limit from business profit to those wages — Form 7206 line 11.

Form 2555: foreign earned income you excluded

Line 12. Excluded foreign earned income reduces the limit by the same amount.

Your result

Tax year 2026

Line 1 — premiums, after the employer-plan months $0

Line 3 — total premiums and long-term care $0

Line 5 — all businesses’ net profit $0

Line 6 — this business’s share 100%

Line 7 — half of self-employment tax, apportioned $0

Line 9 — retirement contribution for this business $0

Line 10 — net earnings limit $0

Line 14 — your deduction $0

What comes next? This deduction comes off your profit before tax is worked out, so it lowers the income tax and leaves the 15.3% self-employment tax where it was. The Tax Set-Aside Calculator shows what to hold back once it is in.

Deciding how much of the profit to retire on? The Solo 401(k) Calculator shows the maximum that fits in a 401(k) after this premium has come off the profit.

Where these figures come from

Form: IRS Form 7206 (2025) — line 14 is the deduction
Authority: IRC §162(l)
Net earnings limit: Lines 4–10 · IRS Form 7206 instructions, 21 Mar 2025
Employer-plan months: Line 1 — eligibility, not enrolment
Long-term care caps: $480 · $900 · $1,800 · $4,810 · $6,020 by age
Reported on: Schedule 1 (Form 1040), line 17
Verified: 4 October 2026

How this is worked out

The deduction is not the premium you paid. It is the smaller of that premium and a net earnings figure — and the net earnings figure is where the surprises are.

Premiums that count

Premiums × (12 − months eligible for an employer plan) ÷ 12

Form 7206 line 1 · instructions, 21 Mar 2025

Eligibility, not enrolment. The instructions: you cannot take the deduction for any month you were eligible to participate in a subsidised employer plan, even if you did not participate. Coverage through a spouse's employer counts the same as your own.

Long-term care, if any

min(paid, the age-based cap)

Form 7206 line 2

The cap is per person: $480 to age 40, $900 to 50, $1,800 to 60, $4,810 to 70, $6,020 above. Paying for long-term care is one of three things that makes Form 7206 mandatory rather than optional.

This business's share of your earnings

This business's profit ÷ total profit across all businesses

Form 7206 lines 5 and 6

A proportion, not a subtraction. Losses are not netted off — the total on line 5 is the sum of the profitable businesses.

The net earnings limit

Profit − (half of self-employment tax × that share) − retirement contribution

Form 7206 lines 7 to 10

This is why a SEP reduces the deduction. Line 9 takes the retirement contribution off the same figure, so the two compete for one ceiling. It only bites when the adjusted earnings are already below the premiums.

Your deduction

min(total premiums, the net earnings limit)

Form 7206 line 14

What it does not reduce

Self-employment tax

Schedule SE · IRC §1402

Premiums paid under the business are not subtracted when working out net earnings for self-employment tax, so this deduction lowers income tax only.

The formulas are shown as the authority defines them, in its own terms — the arithmetic is not copyrightable and the rates are public-domain US government material. What these lines cannot tell you is where your figures came from; that is what the table above is for.

Enter your premiums and your profit, then press Calculate. The employer-plan question above changes the answer for more people than any other field.

Self-Employed Health Insurance Deduction

Your result

Where these figures come from

All the calculators