8872 / If a taxpayer owns a business and the only employees are that taxpayer and his or her spouse, is that taxpayer still eligible for the self-employment health insurance tax deduction with respect to health coverage purchased through the health insurance marketplace?

Yes, a self-employed owner of a small business is entitled to claim the self-employment health insurance tax deduction for health coverage purchased on the health insurance marketplace for the taxpayer and his or her family. This is the case if the taxpayer purchases the health insurance through the individual marketplace or through the small business (SHOP) marketplace. However, if the taxpayer claims the premium tax credit, the amount of the premium tax credit received cannot be deducted.¹

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1. See IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, available at: http://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act (last accessed August 16, 2023).

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