Calculate your 2026 self-employed health insurance deduction (Schedule 1, Line 17). Covers health, dental, vision and LTC premiums. Above-the-line AGI reduction, income tax savings, SE tax not saved.
How the SE Health Insurance Deduction Works
Self-employed individuals can deduct 100% of their health, dental, vision, and eligible LTC insurance premiums as an above-the-line deduction on Schedule 1, Line 17. This reduces your Adjusted Gross Income (AGI) directly β you do not need to itemize deductions to claim it.
Key Limitation: Net SE Income Cap
The deduction cannot exceed your net self-employment income. If your premiums are $15,000 but your net SE income (Schedule C profit) is only $10,000, the deduction is limited to $10,000.
What This Deduction Does NOT Do
The SE health insurance deduction reduces your income tax only. It does not reduce your self-employment tax (15.3% on the first $184,500 + 2.9% above). SE tax is calculated on net SE income before this deduction.
Formula
LTC Eligible: min(LTC paid, age-based limit)
Total Premiums: Health + Dental + Vision + LTC Eligible β APTC Received
SE Deduction: min(Total Premiums, Net SE Income)
Income Tax Savings: SE Deduction Γ Marginal Federal Rate
SE Tax Savings: $0 (SE tax not reduced by this deduction)
Example
David, single, $85,000 net SE income, $12,000 health premiums, $500 LTC (age 45), 2026:
LTC eligible (age 41β50 cap): $880 cap, but paid $500 β $500 eligible
Total eligible premiums: $12,000 + $500 = $12,500
Cap check: $12,500 < $85,000 β full deduction
SE Deduction (Sch 1, Line 17): $12,500
Marginal federal rate: 22%
Income tax savings: $12,500 Γ 22% = $2,750
SE tax savings: $0
Effective premium cost: $12,500 β $2,750 = $9,750
Frequently Asked Questions
Who qualifies for the self-employed health insurance deduction?
You qualify if you are self-employed (Schedule C, Schedule F, or S-corp shareholder-employee with 2%+ ownership), have a net profit, and were not eligible for employer-subsidized health coverage through either your own employer (if you also had a W-2 job) or your spouse's employer for any month you claim the deduction. The deduction is taken on Schedule 1, Line 17 β it reduces adjusted gross income (AGI) directly without requiring itemization. It covers health insurance, dental, and vision premiums for yourself, your spouse, and dependents.
Can I deduct the full premium amount?
You can deduct premiums up to your net self-employment income (profit). If your health insurance premiums exceed your net SE income, the deduction is limited to the income amount β the excess cannot be carried forward. For example, if your premiums are $18,000 but your net SE income is $12,000, your deduction is $12,000. The remaining $6,000 may potentially be deducted as an itemized medical expense on Schedule A (subject to the 7.5% AGI floor), or it may simply be lost if standard deduction is more beneficial.
Does the SE health insurance deduction reduce self-employment tax?
No. The self-employed health insurance deduction reduces income tax only β it is NOT deducted when calculating self-employment (SE) tax. SE tax is calculated on net self-employment income before this deduction. This is a key difference from the SE tax deduction (50% of SE tax on Schedule 1), which does reduce the SE tax base slightly. The health insurance deduction only saves you federal income tax (and state income tax in most states), but not the 15.3% SE tax.
What is the ACA Marketplace interaction (circular calculation)?
If you purchase insurance through the ACA Marketplace and receive a Premium Tax Credit (PTC), a circular calculation exists: the SE health deduction reduces your income, which increases your PTC, which reduces the premiums you actually paid, which reduces your SE health deduction. The IRS provides a worksheet (Publication 974) to resolve this iterative calculation. Most tax software handles this automatically. If you receive the advance PTC (APTC), only the net premiums you actually paid (after APTC) are eligible for the SE health deduction.
What about long-term care insurance premiums?
Eligible long-term care (LTC) insurance premiums can be included in the SE health insurance deduction, but only up to age-based limits. For 2026: age 40 or under: $470; age 41β50: $880; age 51β60: $1,760; age 61β70: $4,710; age 71+: $5,880. These are per-person limits. So if you are 55 and pay $3,000 in LTC premiums, only $1,760 counts. The remaining $1,240 may be deductible as a medical expense on Schedule A subject to the 7.5% AGI floor.