# Self-Employed Health Insurance Deduction



## Launchpad McQuack (Jan 8, 2019)

I'm trying to understand the criteria for taking this.

From reading the instructions for Schedule 1, it sounds like you cannot take this deduction for any time while you are employed by an employer that offers health insurance as a benefit. This would apply to Uber drivers that have a primary job with an employer and just drive for Uber on the side. No deduction for you because insurance was available from your employer.

But what if you start the year employed, and then you lose your job, and after you lose your job your only income for the rest of the year is from self-employment income? For the period while you were employed, you can't take the deduction. What about the period after you lose your job? Does being eligible for COBRA prevent you from taking this deduction (since it is health insurance that is offered by your former employer), even if you don't participate in COBRA?

I also see that one of the conditions for taking the deduction that are listed in the Schedule 1 instructions says...


Schedule 1 said:


> The insurance plan must be established under your business.


...so let's say that you're driving for Uber and doing other independent contractor work and you sign up for health insurance through healthcare.gov. You just fill out an application and sign up as an individual. It's not connected to your business operations in any way. You didn't establish the insurance plan under your business, so based on the quoted statement I take it that means that you cannot take a deduction for that. The health insurance has to be associated with your business operations in order to claim the deduction.


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## UberTaxPro (Oct 3, 2014)

Launchpad McQuack said:


> I'm trying to understand the criteria for taking this.
> 
> From reading the instructions for Schedule 1, it sounds like you cannot take this deduction for any time while you are employed by an employer that offers health insurance as a benefit. This would apply to Uber drivers that have a primary job with an employer and just drive for Uber on the side. No deduction for you because insurance was available from your employer.
> 
> ...


If you're self employed it is an above the line deduction taken on your 1040. As a sole proprietor you are the business so the plan can be in your name.
If you're not self employed the deduction is subject to 7.5% AGI rule and is taken on your schedule A. So, you'd have to itemize to take it. In 2019 it will 10% AGI rule
You can deduct a 1/2 year of self employment.


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