Deducting Medicare insurance premiums

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Zoey
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Deducting Medicare insurance premiums

Post by Zoey »

I know that Medicare Insurance premiums are not deductible on Federal Income tax unless you itemize. I understand that and don't itemize. Can they still be deductible on my Ohio state income tax?


https://www.tax.ohio.gov/portals/0/form ... _32_FI.pdf
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Stinky
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Re: Deducting Medicare insurance premiums

Post by Stinky »

Zoey wrote: Mon May 11, 2020 7:27 am I know that Medicare Insurance premiums are not deductible on Federal Income tax unless you itemize. I understand that and don't itemize. Can they still be deductible on my Ohio state income tax?


https://www.tax.ohio.gov/portals/0/form ... _32_FI.pdf
I'm not an Ohio resident, so I don't know the answer for sure.

But I opened up the link that you posted. It appears that the instructions for lines 1 and 4 answer your question. It looks like you include Medicare Part B premiums on line 4, but not on line 1.

If there's an Ohio resident who can weigh in, that would be great.
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sport
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Re: Deducting Medicare insurance premiums

Post by sport »

I believe the answer is "yes", health insurance premiums are deductible for Ohio income tax.
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

So to be clear...I can deduct Plan B & D premiums which would be on line 4 since I did have Medicare for the full year.

Anyone else from Ohio?
sport
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Re: Deducting Medicare insurance premiums

Post by sport »

I have been deducting all my medical expenses including prescriptions, co-pays, deductibles, eyeglasses, insurance premiums, and mileage to doctor appointments. I've never had any complaints about any of this.
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Kenkat
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Re: Deducting Medicare insurance premiums

Post by Kenkat »

Yes, but I believe it is only to the extent total expenses (Medicare premiums plus unreimbursed expenses) exceed 7.5% of AGI.
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Kenkat wrote: Mon May 11, 2020 10:33 am Yes, but I believe it is only to the extent total expenses (Medicare premiums plus unreimbursed expenses) exceed 7.5% of AGI.
KenKat, this is where it gets confusing. That is only if you itemize on Federal. I don't itemize but think I can still claim the total Medicare premiums on my Ohio State.
Ace1
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Re: Deducting Medicare insurance premiums

Post by Ace1 »

Zoey,
Kenkat is correct.. on the Ohio return, medical that exceeds 7.5% is a deduction.
There is a worksheet in the Ohio instructions that works through this.
(Or in your tax software if you use one).
However, long term care insurance IS deductible without regard to the 7.5%.
Ace
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Ace1

Per the link I posted in my original post, it says on line 4:

health insurance premiums paid during any portion of the year in which you were eligible for Medicare .

So if I don't itemize on Federal, I can fill this out?
sport
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Re: Deducting Medicare insurance premiums

Post by sport »

Zoey wrote: Mon May 11, 2020 11:31 am Ace1

Per the link I posted in my original post, it says on line 4:

health insurance premiums paid during any portion of the year in which you were eligible for Medicare .

So if I don't itemize on Federal, I can fill this out?
Yes you can. I don't itemize for federal either. The OH rules are not dependent on whether or not you deduct for federal.
kaneohe
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Re: Deducting Medicare insurance premiums

Post by kaneohe »

is there such a thing as a standard deduction for OH? a brief search didn't find one....if true,then you need to itemize but may run into % AGI floor limitations similar to Fed.
sport
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Re: Deducting Medicare insurance premiums

Post by sport »

kaneohe wrote: Mon May 11, 2020 3:51 pm is there such a thing as a standard deduction for OH? a brief search didn't find one....if true,then you need to itemize but may run into % AGI floor limitations similar to Fed.
Nope. No standard deduction as an alternative.
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OAG
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Re: Deducting Medicare insurance premiums

Post by OAG »

Go here and read the form: https://www.tax.ohio.gov

The way I read it (I have done OH tax personal returns for 14 years) I do not see where the Medicare Premiums are deductible except where they and the other medical expenses EXCEED 7.5% of your Federal AGI. Federal AGI is the starting point for doing OH personal taxes.
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

In 2017 I went through the process to see if I could itemize on Federal using Turbo Tax. During that process I did include my Medicare premiums. I couldn't itemize so took standard deduction and completed the process. When doing the 2017 state tax it picked up the premiums from the Federal and included them as a deduction. In 2018 I took the standard deduction knowing I didn’t have enough to itemize and that year the premiums were not included since there was no where to record. This year using both Turbo Tax and H & R Block it does not give an option to include the Medicare premiums. I looked through TT and H & R background forms and even did a search for the form that I gave a link to in my original post and it didn’t come up.

So why did the 2017 pick up the premiums even though I did not itemize?


OAG, I found this on the link you posted. According to the below example wouldn’t I then be able to include the premiums on line 4 of the link that I originally posted?

Example: Sue is retired and qualifies for Medicare for the entire year. She pays $50 each month for supplemental health insurance and $20 each month for Medicare B premiums. Sue may not deduct her $50 or $20 monthly payments but she can include these amounts as unreimbursed premiums she paid for dental, vision and health insurance.
Ace1
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Re: Deducting Medicare insurance premiums

Post by Ace1 »

Zoey,
Please review the Ohio medical worksheet line by line.
The first thing you must answer is if you were eligible for Medicare either ALL, Partial, or None of the year.
The first 3 lines on Ohio worksheet are for unreimbursed premiums while NOT covered by Medicare or employer plans.
If you are eligible for Medicare the entire year, the Medicare premiums, supplemental premiums
and other unreimbursed insurance premiums, plus amounts paid for medical care ARE subject to a 7.5% of
Adjusted gross income just like federal.
If you were eligible for Medicare part of the year (perhaps this occurred in 2017 ?), any unreimbursed premiums paid
before you were eligible for Medicare are not subject to the 7.5% AGI and thus deductible in Ohio.
I would also suggest you open the forms menu in Turbo Tax and search for and find the Federal medical worksheet
( and the Ohio medical worksheet as well).
You can both experiment with and see what happens to the data. Fill in the federal one first, and the Ohio form will
pickup your data.
On the Ohio worksheet is a 3 box selection for Medicare eligibility. Experiment with those as well.
You can (and should) open any forms in tax software to see what is happening with the data.
Just because you don’t reach the itemizing threshold doesn’t mean you should not enter the data.

Ace
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Ace, I see what you are saying about the Ohio worksheet and to finish answering all the questions just not line 4. I will go back and look again for the Ohio Medical worksheet for 2019 but it did not come up or could I find it in the forms on my software. I even searched it by name and it didn't appear. Do I have to go through the itemization process on Federal to get the forms? I just bypass that seeing as the standard deduction is way more.

I am not at the computer that has the tax software so I will do more experimenting later.

Thank you everyone for helping me understand this.
Chip
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Re: Deducting Medicare insurance premiums

Post by Chip »

Ace1 wrote: Tue May 12, 2020 12:02 pm If you were eligible for Medicare part of the year (perhaps this occurred in 2017 ?), any unreimbursed premiums paid
before you were eligible for Medicare are not subject to the 7.5% AGI and thus deductible in Ohio.
A minor correction to your thorough answer: I believe the word "unreimbursed" above should be "unsubsidized".
Chip
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Re: Deducting Medicare insurance premiums

Post by Chip »

Zoey wrote: Tue May 12, 2020 1:43 pm Do I have to go through the itemization process on Federal to get the forms? I just bypass that seeing as the standard deduction is way more.
Yes. But you only have to enter medical expenses, not all of your Federal itemized deductions. The software will know to take the standard deduction on your Federal return since it is more favorable to you.
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OAG
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Re: Deducting Medicare insurance premiums

Post by OAG »

Zoey wrote: Tue May 12, 2020 1:43 pm Ace, I see what you are saying about the Ohio worksheet and to finish answering all the questions just not line 4. I will go back and look again for the Ohio Medical worksheet for 2019 but it did not come up or could I find it in the forms on my software. I even searched it by name and it didn't appear. Do I have to go through the itemization process on Federal to get the forms? I just bypass that seeing as the standard deduction is way more.

I am not at the computer that has the tax software so I will do more experimenting later.

Thank you everyone for helping me understand this.
The worksheet is found within the Instructions for preparing the Ohio Return - It is not a separate form with a searchable quality (to my knowledge).The instructions can be downloaded as a pdf at the site I previously mentioned).
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.
Ace1
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Re: Deducting Medicare insurance premiums

Post by Ace1 »

Zoey and OAG,
The Ohio form IS a searchable form, however it uses the name Health Care expenses and MSA wks.
You only need type in health to have it surface under the Ohio forms.
However I recommend you pull up the federal form to slot in your medical by all the categories
that are available on the list.... including medical miles.
These items will flow over to the Ohio form.

Chip,
You are probably correct, however on the form I see it uses the term “unreimbursed”
on lines 1, 2, and 4.

Ace
Chip
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Re: Deducting Medicare insurance premiums

Post by Chip »

Ace1 wrote: Tue May 12, 2020 2:30 pm Chip,
You are probably correct, however on the form I see it uses the term “unreimbursed”
on lines 1, 2, and 4.

Ace
Sorry about that. I commented without looking at the current worksheet and was going from memory. You are correct that the current form says unreimbursed. It appears to have changed from using the word unsubsidized sometime around 2016.

In Tax-Aide training we have been told over the years (by OH Dept of Taxation employees) that only unsubsidized insurance premiums were eligible to be deducted without applying the 7.5% floor. Subsidized premiums were subject to the floor. In the past we were assured that if an employee paid for unsubsidized insurance through the employer (after tax only, of course), that premium would be deductible. Conversely, someone who obtained insurance through their union (for example), where the union subsidized the cost, would be subject to the 7.5% floor.

Looking at the Ohio code section 5747.01 (10)(a) sheds a little light on the subject. It uses the term unsubsidized, but then goes on to say that subsidized premiums may NOT be deducted. That's confusing, but then it goes on to say in (10)(c) that "medical care" may be deducted subject to the 7.5% floor. It further says that "medical care" is defined in 26 U.S. Code § 213. Which just happens to include medical insurance premiums. :shock:

By the way, from at least TY2002 up until TY2017 the Ohio Revised Code did not allow subsidized premiums to be deducted at all. But the Dept of Taxation was allowing them to be deducted via the worksheet, IT-1040 instructions and the training that they were providing to Tax-Aide and other groups. Then they decided with little notice that they would actually follow what was in the code and not allow the deductions. This resulted in the legislature getting involved and writing a retroactive revision to the law in April 2018, once again "allowing" the deduction. Needless to say, this wasn't looked on too favorably by tax preparers. :oops:

One further comment: The worksheet TITLE is "Unreimbursed Medical...". Did they really need to repeat that on multiple lines of the worksheet?
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Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Thanks to all who helped me! I filled out the medical info on the Federal and the medical worksheet did appear in the state forms. Unfortunately the Medicare premiums did not exceed 7.5% of my Federal AGI, but most importantly...I understand and appreciate all who helped!!
Chip
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Re: Deducting Medicare insurance premiums

Post by Chip »

Zoey wrote: Wed May 13, 2020 2:26 pm Thanks to all who helped me! I filled out the medical info on the Federal and the medical worksheet did appear in the state forms. Unfortunately the Medicare premiums did not exceed 7.5% of my Federal AGI, but most importantly...I understand and appreciate all who helped!!
Did you also enter all of your other unreimbursed medical expenses into the tax software? Here are SOME of the things that count:

Other after tax medical and hospital insurance premiums
Most nursing home insurance premiums
Medical services fees and copays (from doctors, dentists, surgeons, specialists, etc.)
Eye exams and eye surgery
Hospital services fees (lab work, therapy, nursing services, surgery, etc.)
Ambulance fees
Prescription medicines and insulin
Medical/dental devices (artificial limbs, false teeth, crowns, dental plates, eyeglasses, contact lenses, hearing aids & batteries, crutches, wheelchair, etc.)
Diagnostic devices (for example, blood sugar test strips)
Transportation for needed medical care
Topic Author
Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Chip, thanks for checking to make sure that I got everything. Medicare premiums are all that I can deduct. I guess in a way that's a good thing! Many thanks!

Chip, another question please!

The Turbo Tax software asks this question:
Were you eligible for Medicare or a health care plan for which your or your spouse's employer paid any portion of the plans cost?

I find this confusing ....at least I did in 2017 and is probably why I was able to deduct Medicare premiums that year. I thought that it meant: Does your or your spouse's employer pay any portion of Medicare. I answered no. It really means ..Were you eligible for Medicare? period. Right? Then goes on to ask about what any employer might have paid. I don't know. Do employers ever pay a portion of Medicare? Probably not, but how would I know? Please point me in the right direction on this.
Ace1
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Re: Deducting Medicare insurance premiums

Post by Ace1 »

Zoey,
That is two questions....
1) Were you eligible for Medicare ?
Or
2) Were you covered by an employer plan where employer paid a portion of the premium ?

Sort of independant questions...
I will add most employer plans usually are shared cost between employer and employee,
so the answer more often than not is likely yes.

Ace
Topic Author
Zoey
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Re: Deducting Medicare insurance premiums

Post by Zoey »

Thanks Ace. I read it as one question.
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