Medical Care Insurance Subtraction for Medicare Premiums

For taxable years beginning in 2007, the Wisconsin subtraction for the amount paid for medical care insurance is expanded to include individuals who had no employer and who were not self-employed. Such individuals may subtract 33.4% of the cost of their medical care insurance on their Wisconsin income tax returns (Form 1). This percentage will increase to 66.7% for taxable years beginning in 2008 and to 100% thereafter.

This subtraction for medical care insurance will now apply to many retired individuals who pay premiums for Medicare Part B (medical services) and Part D (prescription drug coverage). Premiums paid for Medicare Part B and Part D coverage are payments for medical care insurance and can be used in the computation of the subtraction.

There generally is no premium for Medicare Part A (hospital insurance). However, certain persons who are not covered under social security may voluntarily enroll in Medicare Part A. In this situation, the premiums paid for Medicare Part A are also payments for medical care insurance and can be used in the computation of the subtraction.

CAUTION Medicare tax withheld from an individual's wages (see Box 6 of Form W-2) or paid by a self-employed individual is not considered a payment of medical care insurance and may not be used in the computation of the subtraction.

Page last updated December 7, 2007