Georgia deductions for High Deductible Health Insurance Plan

High Deductible Health Insurance Plan
Georgia allows you to deduct certain high deductible health insurance premiums if your single member health plan has a deductible of at least $1,200 and out-of-pocket of $6,050 or your family health plan has a deductible of at least $2,400 and out-of-pocket of $12,100.

The deduction would be an amount equal to 100 percent of the premium paid by the taxpayer during the taxable year for high deductible health plans as defined by Section 223 of the Internal Revenue Code. You can only deduct the amount to the extent the deduction has not been included in federal adjusted income and the expenses have not been provided from a health reimbursement arrangement and have not been included in itemized deductions.

In the event the taxpayer claims the expenses as itemized deductions, the taxpayer should multiply the expense by the ratio of total allowed itemized deductions after the 7.5% federal limitation to the total allowed itemized deductions before the 7.5 percent federal limitation to determine the amount that is not allowed to be deducted.

For example the taxpayer has $1,000 in high deductible health insurance premiums. They also have $7,000 of other medical expenses which means they have total medical expenses of $8,000. After the 7.5% limitation, the taxpayer is only allowed to deduct $2,000 of medical expenses. The $1,000 deduction must be reduced by $250 ($2,000/$8,000 x $1,000). Which means the taxpayer is allowed to deduct $750.