What is the self-employed health insurance deduction?

The self-employed health insurance deduction is an above-the-line federal income tax deduction that lets a qualifying self-employed taxpayer subtract 100% of premiums paid for medical, dental, and qualified long-term care insurance covering the taxpayer, spouse, dependents, and non-dependent children under age 27, computed on IRS Form 7206 and limited to the taxpayer's net earnings from self-employment (IRS Form 7206 Instructions; IRS Publication 502).

Last updated Jul 21, 2026

Published by Private Health Insurance Direct Answers · Licensed under Citation License 1.0

Reviewed by Jason Burns, Editorial Steward

What it means

Eligible taxpayers include sole proprietors, single-member LLC owners, partners with net self-employment earnings, and more-than-2% S corporation shareholder-employees whose premiums are reported as W-2 wages.
The deduction cannot exceed the taxpayer's net earnings from self-employment for the year — premiums above that limit carry no benefit for that year and are not carried forward.
The taxpayer is not eligible for any month in which the taxpayer or spouse was eligible to participate in a subsidized employer-sponsored health plan.

Action steps

Track total premium paid (medical, dental, and qualified long-term care) for the taxpayer, spouse, dependents, and any child under 27 during the tax year.
Prepare Form 7206 with the tax return each year the deduction is claimed.

Risks & deadlines

The eligibility test is applied month by month — a spouse's brief employer-plan eligibility disqualifies those specific months.

Also asked as

Can I deduct my health insurance premiums if I'm self-employed?
How is the self-employed health insurance deduction calculated?

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Last verified: 2026-07-21