The Self-Employed Health Insurance Deduction in Louisiana

Short answer: if you are self-employed in Louisiana with a profit, you can deduct the health insurance you pay for yourself, your spouse, your dependents and children under 27, on Form 7206 and Schedule 1, line 17. Three limits apply: no month you could join an employer plan (yours or your spouse’s), no more than the business’s profit, and no cut to self-employment tax. Louisiana starts from adjusted gross income, so the deduction also lowers your Louisiana tax, at the flat 3% rate. (Reviewed November 2026 by Daniel Griffin, licensed independent advisor, NPN #22052447. Not tax advice; confirm with your tax preparer.)

• $9,293a year of the lowest-cost Silver plan for a 40-year-old in the typical Louisiana parish, 2027, all deductible
• $63,840the 2027 subsidy line for one person in Louisiana; the deduction can pull your income under it
• Line 17of Schedule 1, where a Louisiana contractor, consultant or LLC owner claims it
• $279of Louisiana tax saved on a year of the typical plan at 3%

Who Qualifies in Louisiana

• You have a net profit as a sole proprietor or single-member LLC (Schedule C or F), or self-employment earnings as a partner.
• The plan is under your business. For a sole proprietor, a policy in your own name counts, from the Louisiana marketplace or a private plan.
• No employer plan was open to you that month, through your own job or your spouse’s, even one you turned down.
• The people covered are you, your spouse, your dependents, or a child under 27 at the end of the year.

Own an S corporation? The company has to pay the premiums and put them on your W-2: see the S-corp health insurance deduction in Louisiana.

The Three Limits

• The spouse ruleAny month your spouse’s employer offers you a subsidized plan is out, even if you never enrolled. Count the months carefully when a spouse changes jobs.
• The profit capNo more than the business earned after the deductible half of self-employment tax and your SEP, SIMPLE or solo 401(k) contributions. The cheapest New Orleans Silver plan at 40, $8,147 a year, needs at least that much left.
• Not for SE taxIt lowers income tax only. On $72,000 of profit, self-employment tax is still about $10,173 either way.

The Deduction and the Louisiana Subsidy Line

For 2027 coverage there is no premium tax credit above 400% of the poverty line: $63,840 for one person, $132,000 for a family of four. The self-employed health insurance deduction comes off before that test, so it can move you to the right side of the line.

What It Is Worth in Louisiana for 2027

Louisiana taxes individual income at a flat 3% from the 2025 tax year (Act 11 of 2024), and a resident’s tax table income starts from adjusted gross income (R.S. 47:293), so the deduction lowers your Louisiana tax too. The marketplace in Louisiana has 6 insurers for 2027, a median of 42 plan options per parish, and a PPO in every one of its 64 parishes.

Bronze, Silver and Gold in Louisiana

In 6 of Louisiana’s 64 parishes the cheapest Gold plan for 2027 costs less than the cheapest Silver plan, the result of a pricing practice called silver loading. In New Orleans the cheapest Gold plan is $745 a month with a $2,500 deductible; the cheapest Silver is $679 with a $3,400 deductible. Above the subsidy line you pay the whole premium yourself, so price every metal level before you pick; whichever plan you choose, its full premium is what you deduct.

Bronze and an HSA. Since 2026 every Bronze plan sold through the marketplace counts as an HSA-qualified plan (IRS Notice 2026-05). In New Orleans the cheapest Bronze for a 40-year-old is $459 a month with a $9,900 deductible, $2,636 a year less than the cheapest Silver. For 2027 you can also put up to $4,500 into the HSA ($9,000 with family coverage): a second deduction, on Form 8889, on top of the premiums.

Louisiana Business Taxes When You Work for Yourself

Louisiana starts from adjusted gross income, so the self-employed health insurance deduction carries through to the Louisiana return and comes off income taxed at the flat 3% rate.

How to Claim It

1. Keep the recordsPremium statements for each month, and any marketplace Form 1095-A.
2. Count the monthsLeave out any month an employer plan was open to you or your spouse.
3. Form 7206A year of the New Orleans plan, $8,147, capped at your profit after half of SE tax and retirement savings.
4. Schedule 1Line 17: the result comes off your income on Form 1040.

Before the year closes: the year-end checklist, every date in order. Tax professionals with Louisiana clients: a printable one-page Louisiana handout.

Common Questions

Can I deduct health insurance if I am self-employed in Louisiana?

Yes, if your business has a net profit and you could not join an employer plan, yours or your spouse’s, that month. You deduct the premiums on Form 7206 and Schedule 1, line 17. Louisiana starts from adjusted gross income, so the deduction also lowers your Louisiana tax, at the flat 3% rate.

Can the deduction help me qualify for a premium tax credit?

It can. The deduction lowers the income tested against the 2027 subsidy line ($63,840 for one person, $132,000 for a family of four). The credit then lowers the premium you deduct, and IRS Publication 974 settles both together.

What is Louisiana’s income tax rate?

A flat 3% of taxable income from the 2025 tax year, under Act 11 of 2024 (Department of Revenue bulletin RIB 25-012).

Sources

• IRS, Instructions for Form 7206 (2025)
• IRS, Notice 2008-1 (2-percent S corporation shareholders)
• 26 U.S. Code section 162(l)
• IRS, Publication 974 (premium tax credit)
• Louisiana Department of Revenue, RIB 25-012 (Act 11: flat 3% from 2025)
• CMS, Plan Year 2027 Qualified Health Plan Landscape file
• HHS, 2026 poverty guidelines (2027 coverage)
• Social Security Administration, 2027 fact sheet (wage base)
• Louisiana R.S. 47:293(9) (tax table income for residents starts from adjusted gross income)
• IRS, Notice 2026-05 (Bronze and catastrophic plans as HSA-qualified plans)
• IRS, Revenue Procedure 2026-24 (2027 HSA limits)