8803 / How is health insurance coverage for partners and sole proprietors taxed?
The insurance can also cover a child who was under age 27 at the end of the tax year, even if the child did not qualify as the taxpayer’s dependent. A “child” for this purpose is defined to include a taxpayer’s child, stepchild, adopted child, or foster child. A foster child is any child placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.
In additional, certain premiums paid for long-term care insurance are eligible for this deduction.1
A partner or sole proprietor is not entitled to this deduction for any calendar month in which the partner or proprietor is eligible to participate in any subsidized health plan maintained by any employer of the self-employed individual or spouse. This rule is applied separately to plans that include coverage for qualified long-term care services or are qualified long-term care insurance contracts, and plans that do not include that coverage and are not those kinds of contracts.2