The Iowa Health Insurance Deduction is available to qualifying taxpayers who are 65 years of age or older and whose calculated income for purposes of this deduction is less than $100,000. Eligible taxpayers may deduct 100% of qualifying health and dental insurance premiums paid with post-tax funds.
The deduction applies to qualifying insurance premiums allowed under Iowa law, including certain supplemental health insurance premiums, such as Medicare B supplemental medical insurance and Medicare D voluntary prescription drug insurance, as provided in the Iowa Department of Revenue instructions.
The self-employed health insurance deduction is a separate deduction based on federal treatment and is not subject to the age requirement or the $100,000 income limitation that applies to the Iowa age-based health insurance deduction.
Eligibility and Calculation
Age Requirement
- The Iowa health insurance deduction for health and dental insurance premiums paid with post-tax funds is available only to taxpayers who are age 65 or older by the end of the tax year and meet the applicable income limitation.
- The self-employed health insurance deduction is separate and does not require the taxpayer to be age 65 or older.
Income Limit
- The $100,000 calculated income limitation applies only to the Iowa health insurance deduction available to taxpayers age 65 or older.
- This income limitation does not apply to the separate self-employed health insurance deduction.
Deduction Amount
- Eligible taxpayers may deduct 100% of qualifying health and dental insurance premiums paid with post-tax funds.
- Qualifying premiums may include eligible supplemental health insurance premiums allowed by Iowa instructions. Premiums paid with pre-tax dollars, employer-paid amounts, reimbursed amounts, or amounts already deducted for federal income tax purposes are not eligible for the Iowa deduction.
Reporting on Iowa Tax Forms
IA 1040 Schedule 1, Line 15 – Health Insurance Deduction
- Report the allowable Iowa health insurance deduction on IA 1040 Schedule 1, Line 15.
- Taxpayers must calculate the allowable deduction according to Iowa Department of Revenue instructions and retain documentation supporting the claimed premiums.
- For self-employed individuals, the self-employed health insurance deduction is a separate deduction and must be reported according to the applicable Iowa instructions.
- Part-year residents and nonresidents must determine the allowable deduction using Iowa residency and income allocation rules applicable to their specific situation.
Important Notes
- The Iowa health insurance deduction is separate from the federal self-employed health insurance deduction.
- Only qualifying premiums paid with post-tax funds may be deducted.
- The age 65 or older requirement and $100,000 income limitation apply only to the Iowa-specific health insurance deduction.
- Taxpayers should keep records of qualifying insurance premiums and payment documentation.
- The deduction must be calculated according to the current-year Iowa Department of Revenue instructions.
Source:
Form IA 1040
IA 1040 Schedule 1 Instructions
Disclaimer: Always verify details with the official Iowa Department of Revenue forms and instructions. Tax rules may change annually, and individual circumstances may require professional advice from a CPA or tax attorney.