Form 7206 works out the self-employed health insurance deduction you report on Schedule 1 (Form 1040), line 17. It covers medical, dental, vision and qualified long-term care premiums for you, your spouse, your dependents and a child under 27. You must use the form instead of the simpler worksheet if you have more than one source of self-employment income, file Form 2555, or include long-term care premiums.
This guide follows the 2025 Instructions for Form 7206, as of October 2026. Form 7206 replaced the worksheet that used to sit in Pub. 535.
Who can claim it
One of these has to be true for the year:
- You were self-employed with a net profit on Schedule C or Schedule F.
- You were a partner with net earnings from self-employment on Schedule K-1 (Form 1065), box 14, code A.
- You used one of the optional methods to figure net earnings on Schedule SE.
- You received wages from an S corporation in which you were a more-than-2% shareholder.
Who the cover can include
The instructions let you count premiums for yourself, your spouse and your dependents, plus your child who was under 27 at the end of 2025 even if they weren't your dependent. A child here means a son, daughter, stepchild, adopted child or a foster child placed with you by an authorized agency or a court order. Members of the clergy have their own rules in Pub. 517, and they're worth checking before you rely on the standard treatment.
The plan has to belong to the business
| You are | Policy can be in the name of | If you pay the premiums yourself |
|---|---|---|
| Sole proprietor on Schedule C or F | The business or you | No reimbursement step needed |
| Partner | The partnership or you | The partnership must reimburse you and report it as guaranteed payments |
| More-than-2% S corporation shareholder | The S corporation or you | The S corporation must reimburse you and report it as W-2 wages in box 1 |
Miss the reimbursement step as a partner or shareholder and the plan isn't treated as established under your business, which means no deduction. Medicare premiums you pay voluntarily for coverage in your own name can count.
The month-by-month rule
You can't count premiums for any month you were eligible to take part in a subsidized health plan through your employer, your spouse's employer, or the employer of a dependent or your child under 27. Eligibility is enough: it doesn't matter if you didn't sign up. The rule is applied separately to long-term care plans and other health plans. Premiums you can't deduct here can still be medical expenses on Schedule A if you itemize.
Long-term care premium caps
For qualified long-term care insurance, you include the smaller of the premiums paid for each person or the age-based amount below, using their age at the end of the year.
| Age at year end | Maximum premium counted (2025) |
|---|---|
| 40 or younger | $480 |
| 41 to 50 | $900 |
| 51 to 60 | $1,800 |
| 61 to 70 | $4,810 |
| 71 or older | $6,020 |
The contract has to be guaranteed renewable, generally have no cash surrender value, and cover qualified long-term care services for a chronically ill person.
The net earnings limit
The deduction can't be more than the earnings from the business under which the plan is established. If you have more than one plan, each set up under a different business, you complete a separate Form 7206 for each and use that business's net profit or wages. That's one of the reasons the instructions make the form mandatory when you have several self-employment income sources.
Long-term care cover across several forms has its own ceiling. For a plan that provides long-term care insurance, the total you enter for each person on line 2 of all your Forms 7206 can't be more than that person's age-based limit, so splitting a policy across two businesses doesn't double the cap. For an S corporation owner, the earnings figure is the wages the company paid you, which already include the premiums it paid or reimbursed and reported in box 1 of your W-2.
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What it doesn't change
- It doesn't reduce your self-employment tax. You can't subtract it when figuring net earnings on Schedule SE for the business that set up the plan.
- Don't count the same premiums again as a medical expense on Schedule A.
- If advance premium tax credit payments were made for the coverage, or you're claiming the credit, Pub. 974 sets out how the deduction and Form 8962 interact.
- A retired public safety officer can't use premiums paid from retirement plan distributions that were excluded from income, up to $3,000.
Filling it in
- Total the premiums for each month you weren't eligible for a subsidized employer plan.
- Add qualified long-term care premiums, capped by age.
- Enter the net profit or wages from the business that set up the plan.
- Take the smaller amount and carry it to Schedule 1, line 17.
- Keep premium statements and, for partners and shareholders, proof of the reimbursement.
The verdict
If you pay your own health cover as a freelancer, partner or owner-employee, this deduction is worth claiming carefully. Set the policy up under the business, get reimbursements reported if you're a partner or S corporation owner, drop months when you could have joined a subsidized plan, and use Form 7206 whenever the worksheet doesn't fit.
When the paperwork is unfamiliar, the walkthrough of the clergy self-employment exemption helps.
Frequently asked questions
What is Form 7206?
It's the IRS form used to figure the self-employed health insurance deduction reported on Schedule 1 (Form 1040), line 17.
When must I use Form 7206 instead of the worksheet?
When you have more than one source of self-employment income, file Form 2555, or are including qualified long-term care premiums.
Can I claim the deduction if my spouse's employer offers a plan?
Not for any month you were eligible for a subsidized plan through your spouse's employer, even if you didn't enrol.
Does the deduction reduce self-employment tax?
No. You can't subtract it when figuring net earnings for self-employment tax from the business that set up the plan.
Can I include my adult child?
Yes, coverage for your child who was under 27 at the end of the year counts, even if they weren't your dependent.
What is the long-term care cap for someone aged 61 to 70?
For 2025, the premium counted is limited to $4,810 for that person.
