Can you claim a COBRA on taxes?
Asked by: Anissa Stracke | Last update: September 6, 2025Score: 4.9/5 (23 votes)
Can I deduct my COBRA payments on my taxes?
Are my COBRA premiums deductible? Yes they are tax deductible as a medical expense. There isn't necessarily a “COBRA Tax Deduction”. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
What is the tax credit for COBRA?
If your coverage is from a former employer, such as COBRA or retiree coverage, you can decline the employer coverage, even if it is affordable and provides minimum value, and may be eligible for the Premium Tax Credit for your Marketplace coverage.
Is COBRA considered taxable income?
COBRA premiums may be paid to the employee, and the employee would pay the insurance company directly. Since there is no guarantee that the employee will use the funds to pay the premiums, the funds are considered wages and subject to applicable taxes.
Where do I enter COBRA payments on TurboTax?
Enter your COBRA premiums under Medical insurance premiums.
COBRA Insurance | What You Need to Know
Do COBRA payments show up on W-2?
In general, each employer providing coverage will have to report the prorated cost on the employee's W-2. If the employee is terminated, the employer can also include the COBRA payment amounts paid by the employee after termination.
Is COBRA a self-employed deduction?
If you chose to take COBRA health insurance after leaving a previous job, you may be able to deduct any premiums paid out-of-pocket. However, you are not eligible for the self-employed insurance deduction as the plan is still under your former employer's name.
Do I get a tax form from COBRA?
If you had job-based health coverage. Depending on the kind of job-based coverage you had (including COBRA or retiree coverage), you may get one of these from your employer or insurance company: Form 1095-B, Health Coverage. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
What is the tax penalty for COBRA?
The minimum tax levied by the IRS for non-compliance discovered after a notice of examination is generally $2,500. The maximum tax for “unintentional failures” is the lesser of 10% of the amount paid during the preceding tax year by the employer for group health plans, or $500,000.
What is box 12 dd on W-2?
The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee's Form W-2, Wage and Tax Statement, in Box 12, using Code DD.
What is COBRA IRS?
Page 1. COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985, the law that. 1. added the health care continuation coverage requirements. HIPAA is the Health Insurance Portability and Accountability Act of 1996.
Can you deduct health insurance premiums without itemizing?
Whether you can deduct health insurance premiums from your tax return also depends on a few factors. First, you'll only be able to deduct premiums as medical expenses if you itemize deductions on your tax return, but not if you take the standard deduction. See more details at the bottom of this section.
Are 1099 eligible for COBRA?
Says here "usually, you can't deduct COBRA premiums because the IRS requires the insurance plan be established under your business. Typically, your COBRA plan would be established under the business name of the employer providing the coverage — not under your business."
Is it worth claiming medical expenses on taxes?
The medical expense deduction covers a wide variety of expenses. However, because of the high Standard Deduction and the 7.5% of AGI threshold requirement, it can be difficult to benefit unless you have a lot of out-of-pocket costs.
Do you have a deductible with COBRA?
Your election of COBRA is a continuation of the exact same health plan you had through your employer. Because it is the same insurance policy, if you've met your deductible already, you will not have rollback to $0 out-of-pocket after you've started COBRA.
How to report COBRA on 1095-C?
If using form 1095-C for COBRA reporting, you would enter codes 1G and 2A in part II lines 14 and 16, respectively. Line 15 is not required as affordability is not assessed for COBRA individuals.
How do I claim COBRA on my taxes?
According to the Federal tax laws, your unreimbursed COBRA payments are, in fact, deductible as medical expenses on your 1040 tax return in the same way that you can deduct unreimbursed payments for legal medical services provided by physicians, surgeons, dentists, and other medical practitioners, as well as any ...
Does COBRA get reported on w2?
If the employer charges a COBRA premium for such coverage, then it must be included in the aggregate reportable cost on the Form W-2.
What is the 60 day loophole for cobras?
You have 60 days to enroll in COBRA once your employer-sponsored benefits end. Even if your enrollment is delayed, you will be covered by COBRA starting the day your prior coverage ended.
How does Form 1095-A affect my taxes?
You will use the information from the Form 1095-A to calculate the amount of your premium tax credit. You will also use this form to reconcile advance payments of the premium tax credit made on your behalf with the premium tax credit you are claiming on your tax return.
How does COBRA work after leaving a job?
COBRA coverage lets you pay to stay on your job-based health insurance for a limited time after your job ends (usually 18 months). You usually pay the full premium yourself, plus a small administrative fee. Contact your employer to learn about your COBRA options.
Does the IRS still require proof of health insurance?
Health care coverage documents
You are not required to send the IRS information forms or other proof of health care coverage when filing your tax return. However, it's a good idea to keep these records on hand. This documentation includes: Form 1095 information forms.
Are COBRA payments eligible for tax credit?
ARP COBRA Premium Assistance
The premium assistance applies to periods of health coverage on or after April 1, 2021 through September 30, 2021. An employer or plan to whom COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance.
Can I write off my health insurance premiums if I'm self-employed?
The self-employed health insurance deduction is a federal tax deduction that reduces your annual income. Through this deduction, self-employed workers who have a net profit for the year can write off 100 percent of their health insurance premium. They can also deduct premium costs for any spouse or dependents.
What is the tax form for COBRA coverage?
Enrollment in Health Insurance will generate tax forms. Form 1095 will be issued by your insurance carrier. This form is for informational purposes and should be kept with your tax documentation.