To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for health insurance premiums.
H.R. 111 would create a new above-the-line deduction for health insurance premiums, allowing taxpayers to deduct amounts they paid for health insurance that covers medical care for themselves, their spouses, and dependents. This deduction would reduce adjusted gross income (AGI) for the tax year, and it would be available even if the taxpayer does not itemize deductions. The bill specifies that the deduction cannot be used to offset or duplicate any other deduction or credit under the Internal Revenue Code. The measure would apply to tax years beginning after December 31, 2024 (i.e., starting with the 2025 tax year). The bill also makes clerical changes to the Internal Revenue Code numbering to insert the new deduction. In short, if enacted, many taxpayers who pay health insurance premiums could lower their taxable income directly through an above-the-line deduction, potentially lowering their tax liability, regardless of whether they itemize deductions.
Key Points
- 1Establishes a new Section 224: Deduction for health insurance premiums.
- 2Above-the-line deduction: Available even if the taxpayer does not itemize; reduces AGI.
- 3Eligible amounts: Premium costs for health insurance that constitutes medical care (as defined in section 213(d)) for the taxpayer, the taxpayer’s spouse, and dependents.
- 4Anti-double-counting rule: Amounts deducted under this new section cannot be used to determine other deductions or credits under the code.
- 5Effective date: Applies to taxable years beginning after December 31, 2024 (2025 tax year onward); clerical changes relocate Section 224 to a new numbering sequence (renumbered/inserted in the code).