U.S. Individual Income Tax Return Forms

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2023

2023 Instructions for Form
7206

Department of the Treasury
Internal Revenue Service

TREASURY/IRS
AND OMB USE
ONLY DRAFT
October 25, 2023

Self-Employed Health Insurance Deduction
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Schedule SE (Form 1040) and its instructions, such as
legislation enacted after they were published, go to IRS.gov/
xxxxxx.

What’s New

This form and its separate instructions have replaced the
Self-Employed Health Insurance Deduction Worksheet that was
previously published as a worksheet in Pub. 535, Business
Expenses. Use this form and its instructions to determine any
amount of the self-employed health insurance deduction you
may be able to claim and report on Schedule 1 (Form 1040),
line 17.

General Instructions
Purpose of Form

Use Form 7206 to determine any amount of the self-employed
health insurance deduction you may be able to report on
Schedule 1 (Form 1040), line 17.

You may be able to deduct the amount you paid for medical
and dental insurance and qualified long-term care insurance for
yourself, your spouse, and your dependents.
The health insurance can cover your child who was under age
27 at the end of 2023, even if the child wasn’t your dependent. A
child includes your son, daughter, stepchild, adopted child, or
foster child. A foster child is any child placed with you by an
authorized placement agency or by judgment, decree, or other
order of any court of competent jurisdiction.
Additional information. One of the following statements must
be true.
• You were self-employed and had a net profit for the year
reported on Schedule C (Form 1040) or Schedule F (Form
1040).
• You were a partner with net earnings from self-employment for
the year reported on Schedule K-1 (Form 1065), box 14,
code A.
• You used one of the optional methods to figure your net
earnings from self-employment on Schedule SE.
• You received wages in 2023 from an S corporation in which
you were a more-than-2% shareholder. Health insurance
premiums paid or reimbursed by the S corporation are shown as
wages on Form W-2.
The insurance plan must be established, or considered to be
established, as discussed in the following bullets, under your
business.
• For self-employed individuals filing a Schedule C (Form 1040)
or Schedule F (Form 1040), a policy can be either in the name of
the business or in the name of the individual.
• For partners, a policy can be either in the name of the
partnership or in the name of the partner. You can either pay the
Oct 25, 2023

premiums yourself or the partnership can pay them and report
the premium amounts on Schedule K-1 (Form 1065) as
guaranteed payments to be included in your gross income.
However, if the policy is in your name and you pay the premiums
yourself, the partnership must reimburse you and report the
premium amounts on Schedule K-1 (Form 1065) as guaranteed
payments to be included in your gross income. Otherwise, the
insurance plan won’t be considered to be established under your
business.
• For more-than-2% shareholders, a policy can be either in the
name of the S corporation or in the name of the shareholder. You
can either pay the premiums yourself or the S corporation can
pay them and report the premium amounts on Form W-2 as
wages to be included in your gross income. However, if the
policy is in your name and you pay the premiums yourself, the S
corporation must reimburse you and report the premium
amounts in box 1 of Form W-2 as wages to be included in your
gross income. Otherwise, the insurance plan won’t be
considered to be established under your business.
Medicare premiums you voluntarily pay to obtain insurance in
your name that is similar to qualifying private health insurance
can be used to figure the deduction. Amounts paid for health
insurance coverage from retirement plan distributions that were
nontaxable because you are a retired public safety officer can’t
be used to figure the deduction.

You can claim the deduction for self-employed health
insurance on Schedule 1 (Form 1040), line 17.
Limitations. Generally, you may be able to deduct the total
amount paid in 2023 for health insurance coverage established
under your business (or the S corporation in which you were a
more-than-2% shareholder) for 2023 for you, your spouse, and
your dependents. Your insurance can also cover your child who
was under age 27 at the end of 2023, even if the child was not
your dependent. But don't include the following.
• Amounts for any month you were eligible to participate in a
health plan subsidized by your employer or your spouse's
employer or the employer of either your dependent or your child
who was under the age of 27 at the end of 2023.
• Any amounts paid from retirement plan distributions that were
nontaxable because you are a retired public safety officer.
How to figure the deduction. Generally, you can use the
worksheet in the Form 1040 instructions to figure your deduction.
However, if any of the following apply, you must use Form 7206.
• You had more than one source of income subject to
self-employment tax.
• You file Form 2555.
• You are using amounts paid for qualified long-term care
insurance to figure the deduction.
See Pub. 974 if the insurance plan was considered to be
established under your business and was obtained
CAUTION through the Marketplace, and advance payments of the
premium tax credit were made or you are claiming the premium
tax credit.

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More than one health plan and business. If you have more
than one health plan during the year and each plan is
established under a different business, you must use a separate

Cat. No. 93753O

• An individual who has been unable, due to loss of functional
capacity for at least 90 days, to perform at least two activities of
daily living without substantial assistance from another
individual. Activities of daily living are eating, toileting,
transferring (general mobility), bathing, dressing, and
continence.
• An individual who requires substantial supervision to be
protected from threats to health and safety due to severe
cognitive impairment.

Form 7206 to figure each plan's net earnings limit. Include the
premium you paid under each plan on line 1 or line 2 of each
Form 7206 and your net profit (or wages) from that business on
line 4 (or line 11). For a plan that provides long-term care
insurance, the total of the amounts entered for each person on
line 2 of all Form(s) 7206 can’t be more than the appropriate limit
shown on line 2 for that person.
Qualified long-term care insurance. You can include
premiums paid on a qualified long-term care insurance contract
when figuring your deduction. But, for each person covered, you
can include only the smaller of the following amounts.
1. The amount of premiums paid for that person.
2. The amount shown below. Use the person's age at the
end of the tax year.
a. Age 40 or younger — $480
b. Age 41 to 50 — $890
c. Age 51 to 60 — $1,790
d. Age 61 to 70 — $4,770
e. Age 71 or older — $5,960

TREASURY/IRS
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October 25, 2023

The certification must have been made by a licensed

TIP health care practitioner within the previous 12 months.

Benefits received. For information on excluding benefits you
receive from a long-term care contract from gross income, see
Pub. 525.
Other coverage. You can’t take the deduction for any month
you were eligible to participate in any employer (including your
spouse's) subsidized health plan at any time during that month,
even if you didn’t actually participate. In addition, if you were
eligible for any month or part of a month to participate in any
subsidized health plan maintained by the employer of either your
dependent or your child who was under age 27 at the end of
2023, don’t use amounts paid for coverage for that month to
figure the deduction.
These rules are applied separately to plans that provide
long-term care insurance and plans that don’t provide long-term
care insurance. However, any medical insurance payments not
deductible on Schedule 1 (Form 1040), line 17, can be included
as medical expenses on Schedule A (Form 1040) if you itemize
deductions.

Qualified long-term care insurance contract. A qualified
long-term care insurance contract is an insurance contract that
only provides coverage of qualified long-term care services. The
contract must meet all the following requirements.
• It must be guaranteed renewable.
• It must provide that refunds, other than refunds on the death
of the insured or complete surrender or cancellation of the
contract, and dividends under the contract may be used only to
reduce future premiums or increase future benefits.
• It must not provide for a cash surrender value or other money
that can be paid, assigned, pledged, or borrowed.
• It must generally not pay or reimburse expenses incurred for
services or items that would be reimbursed under Medicare,
except where Medicare is a secondary payer or the contract
makes per diem or other periodic payments without regard to
expenses.
Qualified long-term care services. Qualified long-term care
services are:
• Necessary diagnostic, preventive, therapeutic, curing,
treating, mitigating, and rehabilitative services; and
• Maintenance or personal care services.
The services must be required by a chronically ill individual and
prescribed by a licensed health care practitioner.
Chronically ill individual. A chronically ill individual is a
person who has been certified as one of the following.

Effect on itemized deductions. Subtract the health insurance
deduction from your medical insurance when figuring medical
expenses on Schedule A (Form 1040) if you itemize deductions.
Effect on self-employment tax. You can’t subtract the
self-employed health insurance deduction when figuring net
earnings for your self-employment tax from the business under
which the insurance plan is established, or considered to be
established, as discussed earlier. For more information, see
Schedule SE (Form 1040).
You can generally deduct premiums you pay for certain
kinds of insurance related to your trade or business as
CAUTION an expense. See the instructions for your trade or
business return.

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