Are Medicare Premiums Tax Deductible in 2025?

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Meta Description: Medicare Part B and D premiums are deductible as medical expenses if you itemize AND they exceed 7.5% of AGI. Self-employed people can deduct 100%.

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H1

Are Medicare Premiums Tax Deductible in 2025?

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ANSWER SECTION

Medicare premiums are tax deductible as medical expenses if you itemize deductions on Schedule A and your total medical expenses exceed 7.5% of your adjusted gross income (AGI). This includes premiums for Medicare Part B, Part C (Medicare Advantage), and Part D (prescription drug coverage). Self-employed individuals have an additional option: they can deduct Medicare premiums as an above-the-line deduction on Schedule 1 without needing to itemize.

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H2: Which Medicare Premiums Are Deductible?

Deductible Premiums:

Medicare Part A (Hospital Insurance):

• Most people don't pay premiums (paid through payroll taxes during working years)
• If you do pay premiums (not enough work credits), premiums are deductible

Medicare Part B (Medical Insurance):

• Standard premium: $174.70/month in 2025 (most enrollees)
• Income-adjusted premiums: $174.70 to $594.00/month for high earners
• Fully deductible as medical expense

Medicare Part C (Medicare Advantage):

• Premiums vary by plan ($0 to $200+ per month)
• Fully deductible as medical expense

Medicare Part D (Prescription Drug Coverage):

• Average premium: ~$55/month in 2025
• Fully deductible as medical expense

Medigap (Supplemental Insurance):

• Premiums vary by plan and age ($100 to $400+ per month)
• Fully deductible as medical expense

Total Potential Annual Deduction:

• Part B: $2,096/year
• Part D: $660/year
• Medigap: $2,400/year
• Total: $5,156/year or more

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H2: How to Deduct Medicare Premiums

For Itemizers (Schedule A):

Step 1: Calculate total medical expenses including:

• Medicare premiums (all parts)
• Medigap premiums
• Out-of-pocket medical costs (deductibles, copays, prescriptions)
• Dental and vision expenses

Step 2: Apply the 7.5% AGI floor

• Only expenses exceeding 7.5% of AGI are deductible
• Example: $60,000 AGI × 7.5% = $4,500 floor
• If medical expenses total $8,000, deductible amount = $3,500

Step 3: Enter on Schedule A, Line 1

For Self-Employed (Schedule 1):

Self-employed individuals can deduct Medicare premiums as an above-the-line deduction:

• Form: Schedule 1, Line 17 (Self-Employed Health Insurance Deduction)
• No 7.5% AGI floor applies
• No need to itemize
• Includes premiums for yourself, spouse, and dependents

Requirements for self-employed deduction:

• You must have self-employment income
• The deduction cannot exceed your self-employment income

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H2: 2025 Medicare Premium Amounts

Standard Premiums (most enrollees):

Medicare Part	2025 Monthly Premium	Annual Cost
Part A	$0 (most) or $505-$518	$0 - $6,216
Part B	$174.70	$2,096
Part C (Advantage)	Varies by plan	$0 - $2,400+
Part D	~$55 average	$660
Medigap	$100-$400+	$1,200-$4,800

Income-Related Monthly Adjustment Amounts (IRMAA) for Part B & D:

Income (Single)	Income (Married)	Part B Premium	Part D Adjustment
≤$106,000	≤$212,000	$174.70	$0
$106,001-$133,000	$212,001-$266,000	$244.60	$13.70
$133,001-$167,000	$266,001-$334,000	$349.40	$35.30
$167,001-$200,000	$334,001-$400,000	$454.20	$57.00
$200,001-$500,000	$400,001-$750,000	$559.00	$78.60
>$500,000	>$750,000	$594.00	$85.10

Higher premiums for high earners are also deductible.

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H2: State Tax Treatment

California:

• Follows federal rules
• Medical expense deduction allowed if you itemize
• California also uses 7.5% AGI floor (conforms to federal)
• Self-employed deduction available on CA Form 540

New York:

• Medical expenses deductible on state return
• NY allows deduction for medical expenses exceeding 7.5% of NY AGI

Texas, Florida:

• No state income tax
• No state deduction to consider

Most states follow federal treatment for medical expense deductions.

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H2: Related Tax Questions

For information on the Medicare payroll tax that funds the program, see our guide on what is Medicare tax with the 1.45% employee rate and 2.9% self-employed rate.

Learn about other employment-related deductions in our guide on whether disability benefits are taxable covering SSDI, SSI, and private disability insurance.

Understand the self-employed health insurance deduction in more detail in our guide on whether severance pay is taxable with federal and state withholding rules.

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