Federal Health Insurance Credits

Any Excess Advance Premium Tax Credit repayment from the 2024 federal form 1040, Schedule 2, line 1a may be entered on IA 1040, Schedule 1, line 15 in the year paid for taxpayers who are eligible to claim an Iowa health insurance deduction. Any repayment calculated on your 2025 federal return cannot be included on the 2025 IA 1040, Schedule 1, line 15.

The Net Premium Tax Credit from the 2025 federal form 1040, Schedule 3, line 9 may be reportable as Other Income on the 2026 IA 1040, Schedule 1, line 11. The federal Net Premium Tax Credit is reportable income to the extent this credit was a reimbursement for health insurance premiums deducted from Iowa income in a prior year.

If the deduction is taken on the IA 1040, Schedule A (For tax years prior to 2023), then the federal tax guidance should be followed when addressing the complications due to the impact of the Federal Excess Advance Premium Tax Credit repayment and the Net Premium Tax Credit.

Households Where One Spouse is Age 65 or Older

Assuming the taxpayer’s income is below the income limit, a taxpayer age 65 or older may deduct the cost of health benefits coverage or insurance which covers the taxpayer’s spouse or a dependent. If the spouse who is under the age of 65 or dependent pays for the health coverage the expense would not qualify for the deduction.

Married Separate Filers: If both spouses have self-employment income, the deduction for self-employed health insurance must be allocated between the spouses in the ratio of each spouse’s self-employment income to the total self-employment income of both spouses. If health insurance premiums are paid directly by one spouse, that spouse will claim the entire deduction.

If both spouses paid through a joint checking account, the deduction is allocated between the spouses in the ratio of each spouse’s Iowa taxable income to the total Iowa taxable income of both spouses. For this Iowa taxable income calculation, do not include the health insurance deduction. If one spouse is employed and has post-tax health insurance premiums paid through wages, that spouse will claim the entire deduction. If both spouses pay post-tax health insurance premiums through their wages, each spouse will claim what each spouse paid.