When you live in a state that has an income tax, like Missouri, you need to be aware of the state’s little deductions that aren’t automatically on your federal tax return. One of these is the Health Insurance deduction.
It’s very difficult to claim any medical deductions on your federal income tax return because you have to meet the requirement that your medical expenses exceed 10% of your adjusted gross income. In Missouri, you don’t have that. If your health insurance isn’t already exempt from taxes, you can claim your health insurance as a deduction on your Missouri State income tax return.
You’ll find the deduction on line 12 of the Missouri schedule A. For most people, its just a straight, direct entry on the form. If you happen to have been able to claim your health insurance on your federal schedule A, or had medicare payments withheld from your Social Security, there’s a worksheet to determine just how much of a deduction you’ll get to claim on your Missouri return. (For some people, your computer software will automatically calculate the amount of medicare insurance you can deduct, but you need to watch out if you’re adding additional insurance payments that you don’t delete the medicare payments.)
The health insurance deduction is especially valuable to senior citizens who may qualify for the Missouri Property Tax Credit. It not only reduces their taxable Missouri income, but by reducing the income, it can increase the amount of property tax credit they receive. Many seniors who qualify for the property tax credit don’t have any Missouri taxable income so the preparers don’t bother to look for deductions and that’s a mistake.
If you’d like to take a look at the worksheet for the qualified health insurance deduction, click on this link:
Missouri Health Insurance Worksheet
Also, if you happen to be self employed, be sure to check my post about the Missouri Self-Employed Health Insurance Tax Credit. If you qualify for that, it’s even better for your taxes than the deduction.
Hi David,
If your wife is reimbursed for her insurance premiums, then you can’t claim those premiums as a deduction. But you may claim Medicare D premiums that are not reimbursed by an employer.
Hi Paula,
I think I don’t have all the facts here, but it sounds to me like the business claimed the deduction for the health insurance costs. If that’s the case, then no, she can’t claim those expenses a second time.
Hi Jerry,
That’s a really good question. And I’m really jazzed up about this tax credit because I just did one the other day and it saved my client a lot of money! And, you’re right, looking at the form it does seem like Greek. I do it in my tax software which is easier, but even there it seems a little Greek. So let’s work this out together!
Line 1: That’s you’re federal taxable income from line 43 of your federal tax form 1040. That one’s easy.
Line 2: Amount paid for health insurance premiums that were included in line 1: Aha! This one is trickier! So if you had a number on line 29 of your federal from – for your federal self employed health insurance deduction – you’d back that out of the total health insurance you paid. So let’s say you paid $12,000 for health insurance, but you did get to claim $4,000 as a deduction on line 29 of your federal tax return – then you would put $8,000 on line 2 of the Missouri SHC. Got it?
But it’s not quite that simple. Because, maybe got to claim some health insurance expense on your schedule A. Let’s go to our example again. Let’s say your health insurance was $12,000, and you already claimed $4,000 on line 29. The remaining $8,000 you brought over to your schedule A where you were allowed to claim $1,000 as a deduction. (Just for example purposes – remember I’m making up numbers here.) So, in this case you claim $5,000 of the $12,000 you paid in health insurance expenses on your federal tax return. That still leaves you with $7,000 to claim on your Missouri SHC.
Line 3: Subtract line 2 from line 1. Whew, I can handle that!
Line 4: Calculate an adjusted federal tax using the tax tables. So what would your federal taxes be if you subtracted the health insurance? That’s what this is. This is why I like to do this in tax software. I just reduce the income and compute the tax. You can also get the answer looking it up in the tax tables in the instruction booklet.
Line 5: Federal tax from line 44: This is the actual federal tax that’s really on your tax return.
Line 6: Subtract line 4 from line 6. I can handle this one too! This is going to give you the difference between what your real federal tax is – and what it would be if you could claim your full health insurance tax credit. That’s what Missouri is going to give you as a credit instead.
It’s a bit of work, but it’s a great tax credit! I hope this helps.
Hi Rachel,
Yes, you may claim your dental insurance premiums that you paid out of pocket.
Unfortunately, I was not able to enroll in Obamacare before the open-enrollment deadline. I was able to find some affordable health plans for my family with a company called Insurance Line One.
Hi Jinnie,
If you paid for health insurance premiums with after tax dollars – and you didn’t get to claim it as a deduction on your federal return, then you may claim the Missouri Qualified Health Insurance Premium deduction. The worksheet is a little confusing. If you paid the premiums and it wasn’t Medicare premiums out of your social security, and you didn’t get to claim any benefit on a schedule A for itemized deductions, then ignore the worksheet and just put the full cost of your health insurance premiums on line 12 of your Missouri Schedule A.
We have supplemental insurance premiums along with Medicare premiums. Is Medicare plan D premiums deductible? My wife is reimbursed for out of pocket paid premiums from her Sprint retirement benefits. Can we still claim her supplemental premium on state? We take standard deductions on fed return.
I have a client who paid her corporation to cover her husband’s medical. She actually wrote out checks to the company quarterly. Can I use those amounts toward their Missouri Health Insurance Deduction?
jan, it seems to me that the work sheet to get you deduction is greek. where do you get the numbers to go in each section? sorry if this takes to long to answer. i am doing this on paper and not on computer. thanks for all the previous info. , jerry
Can I claim my premiums paid for dental insurance that were paid out of pocket?
Hi Jan,
I’m a little confused concerning the Qualified Health Insurance Premium deduction as they request the form be completed. The form looks like it is for people itemizing and those who paid premiums out of SSA benefits. Can anyone use this form that had after tax dollars that paid health insurance premiums?
Hi Stephen,
Yes you may claim the portion that was not paid with your HSA dollars. One thing that I’ve found this year is that Missouri is asking for documentation of your payments for your health insurance. I’ve been attaching a PDF file with the returns that I’m filing. I’m not sure how that will work if you’re filing on your own with Turbo Tax or one of those programs. I would get my documentation together so that you’ve got it if they ask you for it.
Hello:
I “funneled” a portion of my cobra premiums through my HSA account, which is not taxed on my federal form. There is another remaining portion of the premiums that I paid out of my own pocket with pretax dollars. Can I deduct this portion on my MO taxes?
Thanks!
Hi Gregg,
So the first question is – could you claim a health insurance deduction on your federal return? I’m assuming the answer is no. If you could claim your health insurance as a deduction on your federal, you can’t claim it on your Missouri because it’s already being deducted.
Second question is, if you’re not claiming it on your federal return – was your insurance paid by your employer or through an employer health plan? If that answer is yes, then you can’t claim it on your Missouri return either.
But, I’m guessing you already know that. You mention your social security medicare. And yes – that is deductible on your Missouri return. If you are using tax software like 1040.com – it should be automatically calculated for you when you input your social security data.
Now, if you pay for out of pocket health insurance in addition to medicare, then you want to include that. You can use this worksheet to figure your deduction: Missouri Health Insurance Worksheet
If you had insurance from the ACA – if you had to pay the Excess Advance Premium Tax Credit Repayment – that’s line 46 of your federal 1040 – that’s also paying for health insurance. People tend to forget that, but you can include that too.
Please explain the heath insurance deduction for 2017 Missouri. I only made $45,000 for the year can I claim my heath insurance or my s.s. Medicare ?
Hi Jon,
If you withdraw funds from your HSA to pay for your COBRA insurance, then the COBRA insurance will not be deductible on your Missouri return because it is already exempt from federal income tax.
I have the same question that Berni asked on Jan 14. If I make COBRA payments, and make an HSA withdrawal to cover those payments, can I still deduct the COBRA payments?
Since there’s no time limit on when you can make the HSA withdrawal, I suspect the answer is “yes”, but would be interested in getting some confirmation on that. Thanks!
Hi Erik,
You report what you actually paid, plus the additional that you have to pay back.
Likewise, for people who wind up getting a refund on their premiums, they report what they paid, less the health insurance refund they’re getting on their federal return.
Hi Daniel,
Yes, you would deduct your Cobra premiums on your Missouri tax return.
Hi Jerry,
You’ve got it right. A net premium tax credit would reduce what you paid in premiums. Likewise, if you had an excess advance premium repayment, that would be added to your health insurance deduction.
Sorry if this was already answered. How does the interplay with the ACA? Can I subtract the actual premiums I paid (Column A of my 1095-A)? Can I subtract the SLCSP premium (Column B of 1095-A)? What about the PTC I had to pay back on Fed? (1095-A column C) – can I add that to Column A amount paid since I ended up paying that back on the Fed return?
I am retired and on a Cobra plan from my last employer. I pay monthly premiums for this Cobra health insurance plan. Can I deduct my monthly health insurance premiums ?
Hi Jan,
Here’s a twist that is not apparent to me, but if I get an ACA Net Premium Tax Credit (Fed 1040 line 69), do I subtract this credit from my total health premiums paid and use that new number when using the Missouri Health Insurance Worksheet? For example, if my premiums were $20,000 and my PTC was $11,000 do I use $9,000 for Worksheet line 6, or do I use the original $20,000? Nowhere in the Missouri tax form instructions could I find anything about how to handle the PTC as it relates to this worksheet.
Thanks so much! Jerry
Hi Harold,
I agree that if the insurance is after tax that he could deduct it. And yes, he should ask his employer. But generally, if insurance is paid through the employer – whether it’s employer paid, or payroll deduction – it’s pre-tax.