These additional examples and explanations are to help you determine if you qualify for claiming the health care insurance premium deduction. The examples are representative of the most common problems that have been identified. Consequently, they may not cover your specific situation. If you are still uncertain if you qualify, you may contact a technical research agent at:
(801) 297-7705
800-662-4335 extension 7705, if you are outside the Salt Lake area
John is a federal employee who retired at the age of 60. The Office of Personnel Management (OPM) continues to fund/subsidize a portion of the retiree's health insurance. His health worsened and he had to purchase an additional health insurance policy at a cost of $300 a month to help offset his deductibles and medications. Since OPM is still funding part of John's health insurance premiums, he cannot claim any deduction.
A taxpayer retired from the State of Utah at the age of 62 due to his poor health. His spouse is age 63 and still working. The retiree had enough annual sick leave to continue the state medical benefits for himself and his spouse until they reach the age of 65, when they will be eligible for Medicare coverage. The spouse's employer does not offer health care benefits. They pay an additional $250 a month for a supplemental health care insurance policy to cover deductibles and co-payments not covered by the state's coverage. The retiree's former employer pays a portion of the premiums for the extended coverage so they cannot claim any deduction.
An individual retires at age 62. The former employer provides a limited health program for retirees and the retiree obtains a separate supplemental health insurance policy. At age 65, he also qualifies for Medicare and the previous employer's health program becomes a secondary benefits payer. The individual may not claim the health care insurance premium deduction.
A taxpayer is self-employed and paid health care insurance premiums for himself. His spouse works and is covered under her employer's health plan. Her employer's plan only provides coverage for her. (Caution: This will rarely happen because most health plans allow an employee to pay an additional portion of the premium for a spouse and dependents.) The taxpayer paid $5,400 in health care insurance premiums for the year. The taxpayer claims 100% of his health care insurance premiums as self-employed health insurance deduction on line 29 of his federal 1040 form. There are no remaining health care insurance premiums to be deducted for the Utah health care insurance premium deduction.
A taxpayer is eligible to participate in an employer-funded plan. The plan provides coverage for the taxpayer's family, but only if the taxpayer pays an additional premium. The taxpayer elects not to have his/her family covered by the plan, choosing instead to purchase a separate, less expensive plan for his/her spouse and children. Since the taxpayer, taxpayer's spouse and children were eligible and could have been included in the employer plan, a deduction for any premiums paid is not allowed.
A taxpayer is retired and is eligible to participate in a plan that is funded and maintained by the employer from which he/she retired. The plan provides coverage for the taxpayer's family, but only if the taxpayer pays an additional premium. The taxpayer cannot deduct any premiums paid, including supplemental insurance or Medicare part B, on his/her state return.
A retired taxpayer is 65, is on Medicare and pays the premiums for a Medicare B supplemental insurance plan and Medicare D prescription drug plan. The taxpayer's spouse is 55 and is still working. The spouse's employer offers a plan that will cover the employee and the taxpayer's spouse. The employer plan pays 80 percent of the premium costs and the employee must pay the other 20 percent. The couple elects to only cover the employed spouse under the company's plan. Since the taxpayer and spouse are both eligible under the employer plan, they cannot deduct any of the premiums paid for the company plan, Medicare B or D, or any supplemental plan.
A taxpayer and his/her spouse are both 65 and are covered by Medicare. They pay premiums for a Medicare B supplemental insurance policy and Medicare D prescription drug plan and the premiums are deducted from their social security. They can deduct the full amount of premiums paid for Medicare B, Medicare D and their supplemental policy if these premiums were not deducted on their federal return.
A taxpayer and his/her spouse are both 65 and participate in a Medicare Part D drug plan. They have three options for paying the premiums:
Regardless of the method they choose to pay the premiums, they can deduct the full amount of premiums paid for their Medicare drug plans if these premiums were not deducted on their federal return.
If you have finished reviewing the above information and qualify to claim the health care insurance premium deduction, use the Health Care Insurance Premium Deduction Calculator below to determine the amount of qualifying health care insurance premiums to deduct on your Utah return.
| 1. | Enter the amount of all qualifying health care insurance premiums paid during the tax year. Do not include any amount reimbursed by the federal government, state government or an agency/instrumentality of the federal or state government. | |
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| 2. | Enter the amount of qualifying health care insurance premiums included on Federal Schedule A, Line 4. | |
| 3. | Enter the amount of qualifying health care insurance premiums included on Federal Form 1040, line 29. Do not include amounts claimed for dental and vision insurance. | |
| 4. | Amount of qualifying health care insurance premiums deducted on federal income tax return – add line 2 and line 3 above. | |
| 5. | Amount of allowed Health Care Insurance Premiums Deduction (line 1 less line 4). Enter this amount on your Utah income tax return, TC-40S, Part 3, using code 74. |
