Yes they are tax deductible as a medical expense. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
Can you deduct COBRA payments on Schedule C?
You may not take COBRA premiums as an itemized deduction, or as the self-employment health insurance premium adjustment to income, and then deduct them as a business expense on Schedule C.
Is payment of COBRA premiums taxable income?
Amounts you pay to maintain medical coverage for a current or former employee under COBRA should not be reported as taxable wages, provided the plan covered by the COBRA premiums is a “qualified plan.” See IRC Section 4980B(g) for details. The value of the benefits in the following examples is generally taxable.
Can you deduct Cobra premiums on your tax return?
If your employer paid for all or part of your COBRA premiums, or if someone else paid for it such as your ex-spouse, you cannot deduct the payments on your own tax return. Additionally, you can deduct medical expenses incurred only in the year for which you are filing the tax return.
How much income do you have to have to pay Cobra?
Tax liability is increased, to achieve repayment of a portion of the subsidy, for those taxpayers whose modified adjusted gross income is between $125,000 and $145,000, or $250,000 and $290,000 for those filing joint returns.
What kind of medical expenses can you claim on Cobra?
Aside from COBRA costs, other allowable medical expenses that you can take to get to 7.5 percent of your adjusted gross income include money spent to diagnose, treat, cure or prevent disease, including expenses for dental work.
Can you keep COBRA insurance if you lose your job?
If you lose or leave your job, you may be able to keep your workplace health insurance through [&COBRA&] temporarily. The [&premiums&] can be expensive when they’re no longer subsidized by your former employer — however, your [&COBRA&] insurance costs may be [&tax&] [&deductible&]. Written by: Christy Rakoczy Bieber.
