If you claimed a deduction for health insurance premiums as an Itemized Deduction on the federal portion of your return, use the worksheets below to calculate the deduction allowed for health insurance premiums. The worksheets follow the priority that Itemized Deductions first apply to health insurance premiums, then to long-term care insurance.
Idaho Medical Savings Account
If you take money out of your Idaho medical savings account to pay medical insurance premiums, no deduction is allowed. Since the health insurance costs are already deducted or accounted for, they can't be deducted a second time.
Salary Reduction Plans
Premiums paid through a cafeteria plan or other salary-reduction arrangement can't be included in the Idaho deduction for health insurance costs. For example, if your health insurance payments are deducted from your paycheck pretax, they don't qualify for the deduction.
Premiums deducted as a business expense can't be included in the Idaho deduction for health insurance costs since these amounts are already deducted. This includes the amounts deducted as self-employed health insurance premiums deducted in arriving at federal adjusted gross income.
Social Security Medicare A and B
No deduction is allowed for the amount paid for employer required Social Security Medicare A. This is the amount listed as a deduction on almost every federal Form W-2 (W2).
If you voluntarily enroll in Medicare B or Medicare D, or aren't covered under Social Security and voluntarily enroll in Medicare A, the premiums you paid may be deducted.
Idaho Standard Deduction
If you don't itemize deductions for Idaho income tax purposes, but instead use the Idaho Standard Deduction, you don't have to reduce your health insurance costs by any amount claimed as a federal Itemized Deduction.
Federal Itemized Deduction Limitations
For federal purposes, the amount of medical expenses allowed as a deduction on the federal Form 1040, Schedule A, is required to be reduced by 10% of adjusted gross income for taxpayers under the age of 65. If a taxpayer or spouse is age 65 or older, the required reduction is 7.5% of adjusted gross income. The following worksheet shows how the limitation of the 7.5% of adjusted gross income required for federal purposes affects the amount of health insurance costs deductible for Idaho purposes.
If you aren't itemizing deductions for Idaho, skip lines 1-6 and enter zeros on lines 8, 12, and 13.
Health Insurance and Long-Term Care Insurance Deduction Limitations
|1. Amount claimed for health insurance costs as an itemized deduction on your Federal return.|
|2. Amount claimed for long-term care insurance as an itemized deduction on your Federal return.|
|3. Additional medical expenses claimed as an itemized deduction on your Federal return.|
|4. Total medical expenses. Add lines 1, 2 and 3.|
|5. Age 65 or older, enter 7.5% of federal adjusted gross income. Under age 65, enter 10% of federal adjusted gross income.|
|6. Medical expense deduction allowed on your Federal return. (Line 4 less line 5. If less than zero, enter zero.)|
|7. Enter the total paid for health insurance.|
|8. Portion of health insurance deduction allowed as an itemized deduction on your Federal return. Enter the lesser of line 1 or line 6.|
|9. Enter the total health insurance costs deducted elsewhere on the federal return.|
|10. Line 7 less lines 8 and 9.This is the amount to enter as your Idaho health insurance deduction allowed.|
Long-Term Care Insurance
|11. Enter the total paid for long-term care insurance.|
|12. Medical expense deduction not allocated to health insurance costs. Line 6 less line 1. If less than zero, enter zero.|
|13. Portion of long-term care insurance deduction allowed on federal Form 1040, Schedule A. Enter the lesser of line 2 or line 12.|
|14. Enter the total long-term care insurance costs deducted elsewhere on the federal return.|
|15. Line 11 less lines 13 and 14. This is the amount to enter for your Long-term care insurance deduction allowed.|