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Do Medicare premiums reduce taxable SSDI income? No. Medicare premiums that are deducted from Social Security Disability Insurance (SSDI) don’t reduce your SSDI income for taxes.
For federal tax purposes, use the amount reported in Box 5 of Form SSA-1099, your Social Security Benefit Statement, when completing Form 1040 line 6a. Box 5 shows your net benefits, which is your gross Social Security benefits minus benefits you repaid. A full explanation of this form is below.
When Medicare premiums are withheld from your SSDI payments, they reduce the payment amount you receive.
That withholding doesn’t reduce the SSDI amount used for federal taxes though. You may qualify for a separate tax deduction for Medicare premiums, including Medicare Part D premiums, under the medical-expense or self-employed health insurance rules explained later.
Not getting Medicare yet? This article explains when you can expect health insurance coverage to start and what you need to do.
Form SSA-1099 shows Medicare premiums, including Medicare Part B premiums, that were deducted from your benefits during the year. Medicare premiums deducted from your benefits are listed in the description of the amount in Box 3.
Box 3 shows your gross Social Security benefits, so it can be higher than the amount you actually received when Medicare premiums were deducted from your payments.
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Get EvaluationWhether any portion of your SSDI income is federally taxable depends on your filing status and combined income, which includes other income, certain tax-exempt interest, and part of your Social Security benefits. The IRS uses your combined income to calculate how much, if any, of your SSDI is included in taxable income.
Enter your Social Security benefits on Form 1040 line 6a, then use the Social Security benefits worksheet in the Form 1040 instructions to calculate how much of your SSDI is taxable.
Medicare Part B premiums can count among the Medicare premiums that qualify as medical expenses under IRS rules.
If you itemize deductions, Medicare Part D premiums can count toward qualifying unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). You report that deduction on Schedule A of Form 1040.
If you are self-employed and had a net profit for the year, you may qualify for a separate health insurance deduction. The IRS provides a Self-Employed Health Insurance Deduction Worksheet in the Form 1040 instructions, although some situations require Form 7206 instead.
Advocate doesn’t provide tax advice. Please use current IRS guidance or talk to a qualified tax professional for your return.
Supplemental Security Income (SSI) is a different federal assistance program funded by general tax revenues rather than Social Security payroll taxes. Because SSI payments are not Social Security benefits for federal tax purposes, the IRS doesn’t include them in taxable income.
If you receive both SSDI and SSI, only include SSDI when figuring taxable Social Security benefits.
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Get EvaluationYes. Form SSA-1099 shows the annual SSDI benefit information you need for your federal return. If you didn’t receive the form or need a replacement, you can request one from the Social Security Administration or download one from your online Social Security account.
No. Medicare premiums withheld from your SSDI do not reduce the net SSDI benefit amount reported in Box 5 of Form SSA-1099. Whether any of that SSDI income is taxable depends on your filing status and other income.
Yes, in some cases. If you itemize deductions, Medicare premiums can count toward your unreimbursed medical expenses. You can deduct the portion of your total qualifying medical expenses that exceeds 7.5% of your adjusted gross income (AGI).
Possibly. Medicare premiums may qualify for the self-employed health insurance deduction if you meet IRS requirements. You can’t claim the deduction for months when you were eligible for subsidized coverage through your employer or your spouse’s employer.
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