Sponsor
Andrew S. Biggs
Representative · R-AZ
Representative · R-AZ
The bill makes private health insurance premiums more affordable for many by allowing an above-the-line deduction that lowers AGI, but it can reduce or displace more generous premium-related refundable credits for lower-income taxpayers and requires coordination that creates modest compliance burdens.
Taxpayers who pay for their own health insurance (individuals, spouses, and dependents) can claim an above-the-line deduction for premiums, lowering AGI, increasing take-home pay, and potentially improving eligibility for other AGI-linked tax benefits.
Households that buy coverage for themselves and their dependents (including parents/families) face a lower after-tax cost of health insurance premiums, making coverage more affordable.
Low-income taxpayers and others who currently rely on refundable premium-related tax credits (like the Premium Tax Credit) may receive smaller net benefits because the new deduction prevents using the same premium payments to claim multiple credits or deductions.
Taxpayers and tax preparers must adapt to a new deduction and coordination rules with existing credits, so the measure only modestly reduces complexity while creating a compliance/coordination burden.
Based on analysis of 2 sections of legislative text.
Creates an above-the-line deduction for qualifying health insurance payments for taxpayers, spouses, and dependents, disallowing double use of those amounts.
Official title: To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for health insurance premiums.
Introduced January 3, 2025 by Andrew S. Biggs · Last progress January 3, 2025
Creates a new above-the-line (adjusted gross income) deduction that lets taxpayers deduct amounts they pay for health insurance that qualify as “medical care” under IRC §213(d) for themselves, their spouse, and dependents. The change makes the deduction available whether or not the taxpayer itemizes and prevents the same amounts from being used again for other deductions or credits. The amendment updates the Internal Revenue Code to add the deduction to section 62(a), renumbers an existing section, and applies to tax years beginning after December 31, 2024.