Health Insurance Premiums
Deduct premiums you paid for health insurance for yourself, your spouse, and your dependents if those premiums have not already been deducted or excluded from your income.
If you claimed a deduction for health insurance premiums on your federal Form 1040, Schedule A, calculate the health insurance premiums allowed as a deduction by using the worksheet on page 20.
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 cannot be deducted a second time.
Salary Reduction Plans
Premiums paid through a cafeteria plan or other salary-reduction arrangement cannot be included in the Idaho deduction for health insurance costs.
Premiums deducted as a business expense cannot be included in the Idaho deduction for health insurance costs since these amounts are already deducted.
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 W-2.
If you voluntarily enroll in Medicare B, or are not covered under Social Security and voluntarily enroll in Medicare A, the premiums you paid may be deducted.
Idaho Standard Deduction
If you do not itemize deductions for Idaho income tax purposes, but instead use the Idaho standard deduction, you do not 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 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.