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Health Care Insurance Premium Deduction

Utah Code §59-10-114(2)(h)

To determine Utah taxable income, an individual may claim a deduction from federal taxable income for amounts paid for health care insurance insurance premiums. The health care insurance can be for:

• the taxpayer,
• the taxpayer's spouse; and
• the taxpayer's dependents

The premiums can only be deducted to the extent that they are not deducted on the taxpayer's federal return under Section 125, 162, and 213 of the Internal Revenue Code (IRC).

• Section 125 applies to employee cafeteria plans which provide cash and qualified health benefits coverage.
• Section 162 applies to self-employed health care premiums deducted as a trade or business expense.
• Section 213 applies to expenses paid during the taxable year for medical care of the taxpayer , the taxpayer's spouse, or a dependent to the extent that the expenses exceed 7.5 percent of the taxpayer's federal adjusted gross income.

Utah Code §59-10-114(3)(e) states that a subtraction (deduction) for an amount paid for health care insurance is not allowed for:

• an amount reimbursed or funded in whole or part by the federal government or the state, and
• for a taxpayer who is eligible to participate in a health plan maintained and funded in whole or in part by the taxpayer's employer or the taxpayer's spouse's employer.
  • Note: Employers who provide any health care for retirees are still providing this service as an employer and the retiree cannot claim any deduction for health care insurance premiums they pay or have deducted from pension payments.

Additional Comments

• The deduction only applies to health care insurance premiums.
• You cannot claim payments for medications, doctor visits, hospitals or health care facilities, and nursing care.
• Accidental death and dismemberment, and long-term care insurance premiums do not qualify for this deduction.

Flow Chart and Deduction Calculator

A flow chart has been developed to help taxpayers determine if the premium paid for health care insurance qualifies for the deduction. If they have qualified premiums, taxpayers can then use a calculator that determines the amount of the premiums they can deduct. Click here to access the he flow chart and calculator.

To claim a health care insurance premium, complete Part 2 of TC-40 S, Income Tax Supplemental Schedule, and transfer the total to line 13 of TC-40.