Self-Employed Health Insurance Deduction Basics
Published November 6, 2026
If you are self-employed and pay for your own health insurance, the IRS lets you deduct those premiums on your income tax return, within limits. It is not the same as an itemized medical deduction. This guide explains the basic rules for 2025 from the Form 7206 instructions, including the limits and the form to use. It is general information. It is not advice about your return.
Whose coverage counts
The Form 7206 instructions say the health insurance can include medical, dental, and vision insurance, and qualified long-term care insurance. It can cover you, your spouse, and your dependents. It can also cover a child who was under age 27 at the end of 2025, even if that child was not your dependent.
The net profit rule
The instructions list the conditions. One of them must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040) or Schedule F (Form 1040). Or you were a partner with net earnings from self-employment reported on Schedule K-1 (Form 1065), box 14, code A. Or you used an optional method to figure your net earnings from self-employment on Schedule SE.
Form 7206 asks for your net profit from the business on line 4. The form uses that number to figure the net earnings limit for the plan. If you have more than one plan under more than one business, you must use a separate Form 7206 for each plan.
The employer-plan rule
You cannot take the deduction for any month you were eligible to participate in an employer-subsidized health plan. If you changed jobs or plans during the year, check each month separately. That rule applies even if you did not actually take part in the plan that month. It covers a plan from your spouse's employer, and a plan from the employer of your dependent or of your child who was under age 27 at the end of 2025.
The instructions also apply the rule to any subsidized plan. A month counts if you were eligible at any time during it, even if you did not sign up. Check your coverage month by month.
Medical expenses and Schedule A
Do not include the self-employed health insurance deduction when you figure your medical expense deduction on Schedule A (Form 1040). The instructions say that any medical insurance payments not deductible on Schedule 1 can be included as medical expenses on Schedule A, if you itemize. Our guide to medical expenses and the 7.5% limit explains how that test works.
Self-employment tax
You cannot subtract the deduction when you figure net earnings for self-employment tax from the business under which the insurance plan is set up. The deduction does not reduce the net earnings that business reports for self-employment tax. Our guide to self-employment tax basics explains how net earnings are figured.
Where the deduction goes
Form 7206 and its instructions are used to determine the amount that goes on Schedule 1 (Form 1040), line 17. The instructions say to claim the deduction there. Our guide to Schedule 1 additional income and adjustments explains the rest of that schedule. Your business income comes from Schedule C.
Keep the records
Keep the premium statements for each plan and the records that show the months of coverage. Keep the net profit figure from your Schedule C, since Form 7206 uses it. Good records make the calculation easier to check. If you are unsure about a specific month, check the coverage records for that month before you claim the deduction.
Upload your documents and answer a few simple questions. Your preparer reviews every deduction and credit and lets you know when your return is ready to sign.
Sources: Sources: IRS, Instructions for Form 7206 (2025), Self-Employed Health Insurance Deduction (https://www.irs.gov/pub/irs-pdf/i7206.pdf); IRS, Form 7206 (2025) (https://www.irs.gov/pub/irs-pdf/f7206.pdf) This is general information, not advice about your specific return.
