are cobra premiums tax deductible
The cost of supplies, equipment and diagnostic devices also are deductible. Medical expenses include your COBRA premiums and payments for long-term care, mental health treatment and transportation to and from health care facilities. Taxability for Current Employees Moving from Full- to Part-time. For current employees who enroll in COBRA after moving from full-time to part-time: employee-paid premiums are deducted pre-tax from their paycheck, just like health insurance premiums. employer-paid premiums are not considered wages paid to the employee. Medical Expenses Deduction. Your COBRA premiums do qualify for the medical and dental expenses deduction. This deduction encompasses a much wider range of health care costs, including not only your premiums, but also your out-of-pocket costs for checkups, preventive care, treatment, prescriptions and surgery. If you do start your own health insurance plan under your self-employed trade or business name, such as when your COBRA coverage has run out or if you've decided to switch for the tax deduction, you can deduct your premiums as an adjustment to income -- meaning you don't have to give up your standard deduction. COBRA is a law (It is not an endorsed insurance plan or company). Answers and comments provided on Cobra insurance .com website are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, governmental, or other professional advice. Taxability of COBRA Premiums as Part of a Severance Package. If an employer chooses to cover COBRA as part of a severance package to the employee, employer-paid COBRA premiums are not considered taxable wages to the employee if: the employer deducts the premiums from severance pay and pays the carrier directly, or. I hope this helps! If you are paying the COBRA premiums with out of pocket funds, you can deduct the premiums paid as an eligible medical expense on Schedule A as an itemized deduction. Only your total medical expenses greater then 10% of your AGI can be deducted if you are under the age of 65. If you are age 65 or older then the AGI limit is 7.5%. Your total itemized deductions must be greater then your standard deduction to have any tax benefit. Cobra insurance .com does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service, health plan, or service provider mentioned or any opinion expressed in the website. Replies, comments, or information gathered on Cobra insurance .com website may not be accurate but are intended to be helpful. Your COBRA premiums might be tax-deductible as a medical expense, depending on how much money you earn and how many medical expenses you had for the year. Medical expenses are deductible only if they amount to more than 10 percent of your annual gross, or pretax, income, or 7.5 percent if you were born before 1949. For current employees who enroll in COBRA after moving from full-time to part-time: 1  employee-paid premiums are deducted pre-tax from their paycheck, just like health insurance premiums. 2  employer-paid premiums are not considered wages paid to the employee.
Yes, COBRA premiums might be tax-deductible as a medical expense, depending on how much money you earn and how many medical expenses you had for the year.