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Self-Employed Health Insurance Tax Deduction for 2027: How It Works in Michigan
Quick answer: Self-employed people can generally deduct health insurance premiums for themselves, a spouse and dependents, up to their net business profit. It is an adjustment to income, so you can take it even if you do not itemize.
Who qualifies
You must have net profit from your business, and you generally cannot take the deduction for any month you were eligible for an employer plan, including one offered through a spouse. Premiums for medical, dental and vision coverage are generally included. Whether a specific private plan qualifies is worth confirming with your CPA.
The limit
The deduction cannot exceed your net self-employment profit. If you have a loss, you generally cannot deduct premiums.
State taxes in Michigan
Michigan has a flat state income tax, so the self-employed health premium deduction helps at both the federal and state level.
The subsidy connection
Because the deduction lowers your adjusted gross income, it can also change the income used for a marketplace credit. Your CPA or tax software handles the math. Plan ahead if you are near the 400% line.
S-corporation owners
If you are a more-than-2% shareholder of an S corporation, premiums generally have to run through the company's payroll. This is a common mistake.
This is general information, not tax advice. Confirm the details for 2027 with your CPA.
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