Paul Sanchez
Missouri residents who pay for health insurance out of their own pockets can claim a deduction on their state income tax returns. This is known as the Missouri Health Insurance deduction. If you deducted your health insurance expenses on your federal tax return, you may still be eligible for a deduction on your Missouri state return. However, if your insurance was paid for by your employer or through an employer-provided health plan, you cannot claim this deduction.
| Characteristics | Values |
|---|---|
| Can medical insurance premiums be deducted from Missouri state taxes? | Yes |
| What if the insurance is paid by the employer? | Cannot be claimed on Missouri return |
| What if the insurance is claimed on federal tax returns? | Cannot be claimed on Missouri return |
| What if the insurance is paid from HSA dollars? | The portion paid from HSA dollars cannot be claimed |
| What if the insurance is paid from SSA benefits? | Can be claimed |
| What if the insurance is paid from Medicare? | Can be claimed |
| What if the insurance is paid from ACA? | Can be claimed |
| What if the insurance is paid from Cobra? | Cannot be claimed as it is exempt from federal income tax |
| Is there a floor on healthcare expenses? | No |
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What You'll Learn
What are 'Qualified Health Insurance Premiums'?
Qualified Health Insurance Premiums refer to any and all payments made by an individual for health insurance. These premiums are considered medical expenses and can be deducted from federal tax returns, provided they meet certain requirements. For instance, in 2019, the IRS allowed taxpayers to deduct total qualified unreimbursed medical care expenses exceeding 7.5% of their adjusted gross income. This threshold increased to 10% of AGI starting in 2020.
In the context of Missouri state taxes, there is no floor on healthcare expenses, unlike the federal requirement of expenses exceeding 7.5% of adjusted gross income. This means that if your health insurance is not already exempt from taxes, you can claim it as a deduction on your Missouri state income tax return. It's worth noting that this deduction applies only to expenses not compensated by insurance or other means.
For self-employed individuals, there is an adjustment to income for premiums paid on a health insurance policy covering medical care, including qualified long-term care insurance for themselves, their spouse, and dependents. This policy can also cover a child under the age of 27, even if they are not a dependent.
To claim these deductions, taxpayers must provide the department of revenue with proof of the amount of qualified health insurance premiums paid. This proof is essential for substantiating the deductions claimed on their tax returns.
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What if my insurance was paid by my employer?
If your insurance was paid by your employer, you cannot claim it on your Missouri state tax return. This is because you have already received your credit for it. If your employer takes the premiums out pre-tax, then they are not deductible.
In Missouri, there is no floor on healthcare expenses, unlike federal tax returns, which require that medical expenses exceed 7.5% of your adjusted gross income. This means that in Missouri, you can claim your health insurance as a deduction on your state tax return if it isn't already exempt from taxes.
Qualified Health Insurance Premiums refer to any and all payments made for health insurance. If you deducted these expenses on your federal tax return, you may still get a deduction on your Missouri state tax return. For example, if you paid for out-of-pocket health insurance in addition to Medicare, you can include this in your Missouri Health Insurance Worksheet.
To claim the Missouri Health Insurance deduction, you will need to provide the department of revenue with proof of the amount of qualified health insurance premiums paid. This can be done by submitting a summary of any recommendations made in a qualified home energy audit and proof of the amount paid for any activities for which a deduction is claimed.
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Can I deduct premiums paid out of pocket?
In Missouri, you can claim health insurance as a deduction on your state income tax return if your health insurance isn't already exempt from taxes. This is not the case for federal tax returns, where you must meet the requirement that your medical expenses exceed 7.5% of your adjusted gross income.
If you are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program, you cannot deduct the premiums paid with that money because you are an employee whose insurance premiums are paid with money that is never included in your gross income.
If your employer takes the premiums out pre-tax (before taxes are calculated on income), then they are not deductible. In this situation, you have already received your credit. However, if you don't claim 100% of your paid premiums, you can include the remainder with your other medical expenses as an itemized deduction on Schedule A (Form 1040).
If you are self-employed and have a net profit for the year, you may be eligible for the self-employed health insurance deduction. This is an adjustment to income, rather than an itemized deduction, for premiums you paid on a health insurance policy covering medical care, including a qualified long-term care insurance policy for yourself, your spouse, and dependents.
Health insurance premiums (including those paid through the Marketplace) can be paid out-of-pocket as Medical Expenses in Schedule A - Itemized Deductions. These medical expenses are subject to the 10% rule (or 7.5% if you are over 65) and you can only claim the excess over 10% (or 7.5%) of your Adjusted Gross Income.
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What if I paid through an HSA account?
In Missouri, you can claim your health insurance as a deduction on your state income tax return if your health insurance isn't already exempt from taxes.
Now, what if you paid through a Health Savings Account (HSA)? Well, HSAs are tax-advantaged accounts that those with a high-deductible health plan (HDHP) can use to save for qualified medical expenses and insurance coverage. Missouri residents can pay for qualified medical expenses with pre-tax dollars and save for retirement on a tax-deferred basis. The money deposited into an HSA is not subject to federal income tax when the deposit is made. HSA contributions can be made by the employer, the employee, or anyone else and are tax-deductible. The funds in an HSA account can be used to cover premiums and roll over and accumulate year to year if not spent.
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How do I calculate my deduction?
To calculate your deduction for medical insurance premiums in Missouri, you must first determine whether your health insurance is already exempt from taxes. If it is, you cannot claim it as a deduction on your Missouri state income tax return.
If your health insurance is not exempt from taxes, you can claim it as a deduction. In this case, you must provide the department of revenue with proof of the amount of qualified health insurance premiums you have paid. This includes any payments you made for health insurance, whether directly or through payroll deductions.
It is important to note that if your employer takes the premiums out pre-tax, you cannot deduct them on your Missouri tax return. This is because you have already received a tax credit for these premiums.
Additionally, if you are using tax software like 1040.com, the calculation may be done automatically when you input your social security data. You can also refer to the Missouri Health Insurance Worksheet to help you figure out your deduction.
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Frequently asked questions
Yes, if your health insurance isn't already exempt from taxes, you can claim it as a deduction on your Missouri State income tax return.
Qualified Health Insurance Premiums are any and all payments that you made for health insurance.
If your employer takes the premiums out pre-tax, then they are not deductible. In this situation, you have already received your credit.
You may claim the portion that was not paid with your HSA dollars.
If you pay for your health insurance with pre-tax dollars, you can't claim it on your Missouri return.
