Are Medicare Premiums Tax Deductible in 2026?

Direct Answer: Are Medicare Premiums Deductible in 2026?

It depends on how you file. Medicare Part B, Part D, Medigap, and Medicare Advantage premiums are tax deductible in 2026 if you itemize on Schedule A and your total medical expenses exceed 7.5% of your adjusted gross income (AGI). Self-employed people can deduct 100% of Medicare premiums above the line, with no AGI floor, through the self-employed health insurance deduction.

What Medicare Premiums Actually Cost in 2026

Original Medicare charges no premium for Part A hospital insurance for the roughly 99% of beneficiaries who paid Medicare payroll taxes for at least 40 quarters. Medicare Part B, which covers doctor visits and outpatient care, carries a standard monthly premium of $202.90 in 2026, or $2,434.80 for the year. Higher earners pay more through the income-related monthly adjustment amount (IRMAA), a surcharge added directly to the Part B and Part D premium that CMS bases on the tax return from two years earlier.

Medicare Part D prescription drug premiums averaged around $34.50 a month for standalone plans in 2026, according to CMS, while Medicare Advantage premiums range from $0 to several hundred dollars a month depending on the plan. Medigap supplemental policies, which are not run by Medicare but fill Original Medicare's cost-sharing gaps, typically cost $150 to $300 a month depending on the plan letter, state, and age at enrollment. Every one of these premium types is potentially deductible under the rules below.

How to Deduct Premiums With the Schedule A Itemized Medical Expense Deduction

The Internal Revenue Service treats Medicare Part B, Part D, Medigap, and the premium portion of a Medicare Advantage plan as deductible medical expenses under IRS Publication 502, the same category as doctor copays, prescription costs, and dental work. The catch is the 7.5% AGI floor: you can only deduct the amount of your combined medical expenses, including premiums, that exceeds 7.5% of your adjusted gross income in 2026. A retiree with $60,000 in AGI would need more than $4,500 in total medical expenses before any of it counts, and only the amount above that floor is deductible.

The itemized deduction only helps if your total itemized deductions, including medical expenses, mortgage interest, state and local taxes, and charitable gifts, exceed your standard deduction. Because Medicare Part A is premium-free for roughly 99% of beneficiaries, it typically is not part of this deduction; the Schedule A deduction mainly applies to Part B, Part D, Medigap, and Medicare Advantage premiums, plus any Part A premium paid by beneficiaries who did not work the required 40 quarters.

The Self-Employed Health Insurance Deduction: A Better Option for Business Owners

Self-employed people, including sole proprietors, partners, and more-than-2% S corporation shareholders, can deduct 100% of their Medicare Part B, Part D, Medigap, and Medicare Advantage premiums as an above-the-line deduction, reported on Form 7206 and carried to Schedule 1 of Form 1040. Unlike the Schedule A itemized deduction, there is no 7.5% AGI floor, and you do not need to itemize to claim it. The IRS confirmed in Chief Counsel Advice memo 201228037 that Medicare premiums qualify for this deduction even when the taxpayer is not enrolled in Medicare through the business itself.

Two limits apply. First, the deduction cannot exceed your net self-employment income for the year; if your business shows a loss, you cannot claim the deduction that year. Second, you cannot claim it for any month you or your spouse were eligible to participate in an employer-subsidized health plan, even if you did not enroll. If your spouse is under 65 and buys an ACA-compliant marketplace plan instead of employer coverage, those premiums qualify for the same above-the-line deduction alongside your Medicare premiums.

Can You Pay Medicare Premiums Tax-Free From an HSA?

Health savings account holders age 65 and older can withdraw HSA funds tax-free to pay Medicare Part B, Part D, and Medicare Advantage premiums, under the rules in IRS Publication 969. This is not technically a deduction, it is a tax-free distribution, but the effect is the same: those premium dollars never get taxed. The one exception is Medigap: IRS Publication 969 specifically excludes Medigap premiums from tax-free HSA withdrawals, so Medigap must be paid with after-tax money even if HSA funds are available.

The tax-free withdrawal option only works if you already have money in an HSA, which requires that you or an employer contributed to it while you were covered by an HSA-eligible high-deductible health plan before enrolling in Medicare. Once you enroll in any part of Medicare, you can no longer contribute new money to an HSA, but existing HSA funds remain available for qualified medical expenses, including Medicare premiums, for the rest of your life.

Should You Itemize or Take the Standard Deduction in 2026?

The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, and filers 65 or older get an additional $2,050 (single or head of household) or $1,650 per spouse (married filing jointly) on top of that. The One Big Beautiful Bill Act also created a new $6,000 senior bonus deduction per qualifying person 65 and older for tax years 2025 through 2028, which phases out starting at $75,000 of modified adjusted gross income for single filers and $150,000 for married couples filing jointly.

Stack those together and a single 65-year-old filer could claim $16,100 plus $2,050 plus $6,000, a combined $24,150 in deductions in 2026 before counting a single medical expense. Because Medicare premiums only help through Schedule A once your total itemized deductions exceed that combined number, most retirees on a fixed income with modest mortgage interest or state and local taxes come out ahead with the standard deduction, and their Medicare premiums provide no additional tax benefit. Run both calculations, or use IRS Free File or a tax preparer's software, before assuming itemizing your premiums will lower your bill.

Alternatives If You Can't Deduct Your Medicare Premiums

If itemizing does not help and you are not self-employed, three programs can lower or eliminate your Medicare premiums directly instead of through a tax deduction. Medicare Savings Programs, run by each state Medicaid agency, pay the Part B premium (and sometimes Part A, deductibles, and coinsurance) for beneficiaries with limited income and assets; income limits are generally around 100% to 135% of the federal poverty level depending on the specific program (QMB, SLMB, or QI) and state. Extra Help, also called the Part D Low-Income Subsidy, lowers Part D premiums, deductibles, and copays for beneficiaries with limited income and resources.

Some states also run their own pharmaceutical assistance programs that supplement Extra Help. Because these programs reduce what you pay for premiums in the first place, they typically save more money than a tax deduction would, especially for beneficiaries who take the standard deduction and get no separate tax benefit from Schedule A. Use the CoveredUSA screener to check whether you qualify for a Medicare Savings Program or Extra Help based on your state and income.

Can I deduct my Medicare Part B premium if I take the standard deduction?

No. If you take the standard deduction, which is $16,100 for single filers and $32,200 for married couples filing jointly in 2026, you cannot separately deduct Medicare Part B or any other premium on Schedule A. The only way around this is the self-employed health insurance deduction, which is available even if you take the standard deduction, because it is claimed above the line on Schedule 1 rather than as an itemized deduction.

Are Medigap premiums tax deductible?

Yes, with the same rules as other Medicare premiums. If you itemize, Medigap premiums count toward the 7.5% of AGI floor on Schedule A. If you are self-employed, Medigap premiums qualify for the 100% above-the-line self-employed health insurance deduction. The one place Medigap does not qualify is HSA withdrawals: IRS Publication 969 excludes Medigap premiums from tax-free HSA distributions, unlike Part B, Part D, and Medicare Advantage premiums.

Can self-employed people deduct 100% of their Medicare premiums?

Yes, if two conditions are met: your net self-employment income for the year equals or exceeds the premiums you want to deduct, and you were not eligible for employer-subsidized health coverage through your own job or a spouse's job during those months. The deduction covers Part B, Part D, Medigap, and Medicare Advantage premiums and is claimed on Form 7206, then carried to Schedule 1 of Form 1040.

Can I use my HSA to pay Medicare premiums tax-free?

Yes, once you turn 65, you can withdraw HSA funds tax-free to pay Medicare Part B, Part D, and Medicare Advantage premiums under IRS Publication 969. Medigap premiums are the one exception and cannot be paid tax-free from an HSA. You must already have HSA funds from before you enrolled in Medicare, since Medicare enrollment ends your ability to contribute new money to an HSA.

What is the 7.5% AGI threshold for medical expense deductions in 2026?

The 7.5% AGI threshold means you can only deduct the portion of your total medical expenses, including Medicare premiums, doctor copays, and prescriptions, that exceeds 7.5% of your adjusted gross income. A filer with $50,000 in AGI would need more than $3,750 in total medical expenses before any amount becomes deductible on Schedule A, and this threshold has been permanent since the Consolidated Appropriations Act, 2021.

Does the new $6,000 senior deduction affect whether I should itemize Medicare premiums?

Yes. The One Big Beautiful Bill Act's $6,000 senior bonus deduction, available for tax years 2025 through 2028, stacks on top of the regular standard deduction and the existing age-65 additional standard deduction, raising the bar your itemized deductions must clear before Schedule A helps at all. For a single 65-year-old, that combined floor can exceed $24,000 in 2026, meaning fewer retirees benefit from itemizing Medicare premiums than in past years.

Are IRMAA surcharges tax deductible?

Yes. The income-related monthly adjustment amount (IRMAA) is a surcharge added directly to your Part B and Part D premium, not a separate fee, so it follows the same deduction rules as the base premium: deductible above 7.5% of AGI if you itemize, or 100% deductible if you qualify for the self-employed health insurance deduction.

What if I can't afford my Medicare premiums at all?

If a tax deduction will not help because you owe little or no tax, Medicare Savings Programs and Extra Help (the Part D Low-Income Subsidy) can pay or reduce your premiums directly based on income and assets, run through your state Medicaid agency. These programs typically save more than a deduction would. Use the CoveredUSA screener to check eligibility in your state.