Missouri Tax Credit for Self-Employed Health Insurance

MO self-employed health insurance tax credit


One of the really fun parts of my job is finding cool tax deductions or tax credits that most people don’t know about that can really benefit people.  Here’s a cool one:  The Missouri Self-Employed Health Insurance Tax Credit.


The thing about Missouri Tax Credits is that most of them won’t just pop up on your computer software.  You have to actually know about them and specifically request the forms to come up.  Major things, like the Missouri Property Tax Credit will usually have a pop-up reminding you to apply for it if you meet the criteria, but most other tax credits just hide in the corner.  The Self-Employed Health Insurance Tax Credit is one of the sneaky, hide in the corner credits.


How sneaky is it?  To tell you the truth, I called the Missouri Department of Revenue to ask a few questions and the person on the other end of the phone had never even heard of it.  She had to go hunt down someone who knew about the Self-Employed Health Insurance tax credit before she could answer my question.  I’ve never had that happen before.  The Missouri Department of Revenue front line folks are pretty knowledgeable and quick with answers.  While I tend to stump the IRS on a regular basis (I think if they had caller ID they’d never answer my phone calls,) I’ve never stumped a Missouri DOR employee before.


Here’s how it works:  Let’s say you own your own company and you also pay for your own health insurance.  Normally, on your federal tax return, you can claim a deduction for your health insurance up to the amount of your business profit.  But what if your business didn’t have a profit?  Or if your business profit was less than what you paid for your health insurance?  That’s where the Missouri Self-Employed Health Insurance Tax Credit kicks in.  Whatever tax savings you lost on your federal income tax return because you couldn’t claim your self-employed health insurance will become a tax credit to you in Missouri.


I know that sounds pretty confusing so here’s an example:  Let’s say your federal taxable income on your 1040 was $100,000 (I like to use round numbers.)  But you couldn’t claim your self-employed health insurance because your business actually had a loss (we’ll assume the $100,000 is from your spouse’s wages and other income.)  Your health insurance cost you $6,000 for the year.  If you could have claimed that as a deduction, it would have saved you $1,500 on your federal tax return.  With the Missouri Self-Employed Health Insurance Tax Credit, you get to take that $1,500 as a credit against your Missouri state income tax liability.  How cool is that?


Now that was a pretty drastic example, but even so, claiming a dollar for dollar tax credit against what you missed out on from your federal income tax return is a great deal.  Here’s a link to take a look at the form:

Missouri Self-Employed Health Insurance Tax Credit


So you want to know the best part?  Many of the Missouri tax credits have limitations that, if missed, you don’t get a second chance to claim them.  But with the Self-Employed Health Insurance Tax Credit, if you happened to miss out on claiming this credit last year, you can go back and amend your prior Missouri tax return and still get the refund.



5 thoughts on “Missouri Tax Credit for Self-Employed Health Insurance

  1. Hi Bob,
    I’m not surprised they couldn’t answer your question. When I was researching the credit, the woman I spoke to hadn’t even heard of it before. It’s not used very often. But I do know the answer to your question! The answer is no – you cannot “double dip.”

    So, you’ll want to use the deduction that makes the most sense for you. (I just did a return yesterday where her federal tax rate was zero, but her Missouri rate was 6%. So for her, she’d want to do the MO A. But I would think many people would be better off with the SHC.)

  2. Here’s a good question that Mo DOR cannot answer. Assuming I did not receive any benefit on my federal return from self employed health insurance, can I take both the MO A line 12 subtraction for qualified health insurance premiums and the self employed health insurance credit?

  3. Hi Gail,
    If you deducted the health insurance on the 1040 as self employed health insurance, then you cannot claim it again on your Missouri return. Sorry.

  4. If you are able to claim the Self-employed health insurance deduction on your federal retrun, are you still able to take the deduction on your MO-A as a Qualified Health Insurance Premium. (Was not taken on schedule A of the federal return of course). Thanks

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