Updated July 2026 · MarylandPlanFinder.com — Licensed Health Insurance Producer (NPN #21249133)

Self-Employed Health Insurance Tax Deductions in St. Mary's County, Maryland

Self-employed individuals in St. Mary's County can deduct 100% of health insurance premiums paid, reducing taxable income.
Eligibility requires you to not be offered coverage by an employer-sponsored plan and to have net earnings from self-employment.
The deduction is taken "above the line" on your federal tax return, lowering your Adjusted Gross Income (AGI).
Maryland Health Connection, the state marketplace, offers PPO, HMO, and EPO plans from 4 confirmed carriers in Rating Area 1 for 2026.

If you're self-employed in St. Mary's County, Maryland, understanding how to deduct your health insurance premiums can significantly reduce your tax burden. The IRS allows eligible self-employed individuals to deduct 100% of their health insurance costs, including premiums for medical, dental, and long-term care insurance, for themselves, their spouse, and their dependents. This "above-the-line" deduction directly lowers your Adjusted Gross Income (AGI), which can impact other tax credits and deductions you might be eligible for. To qualify, you must not be eligible to participate in an employer-sponsored health plan, and you must have net earnings from self-employment.

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Who Qualifies for the Self-Employed Health Insurance Deduction?

The self-employed health insurance deduction is a valuable tax benefit, but specific criteria must be met to claim it. The IRS defines a self-employed individual as someone who is a sole proprietor, a partner in a partnership, or a more-than-2% shareholder in an S corporation. Here are the primary requirements:

Self-Employment Income: You must have net earnings from self-employment. The deduction cannot exceed your net self-employment income from the business for which the plan was established.
No Employer-Sponsored Plan Eligibility: Neither you nor your spouse can be eligible to participate in an employer-sponsored health plan. If you or your spouse could have enrolled in an employer plan, even if you chose not to, you generally cannot take this deduction. This rule applies even if the employer-sponsored plan coverage would have been more expensive or less comprehensive.
Premiums Paid: The premiums must be paid by you (or your business) for medical, dental, or long-term care insurance covering yourself, your spouse, and your dependents.

For residents of St. Mary's County, Maryland, who meet these criteria, this deduction can apply to plans purchased through Maryland Health Connection or directly from an insurer.

Understanding Health Insurance Options in St. Mary's County

Self-employed individuals in St. Mary's County have several avenues for obtaining health insurance. The primary source for individual and family plans is Maryland Health Connection, the state-based marketplace. Through the marketplace, you can compare a range of plans and determine your eligibility for financial assistance, such as advance premium tax credits (subsidies) and cost-sharing reductions. In 2026, residents of St. Mary's County can choose from Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Exclusive Provider Organization (EPO) plans. Unlike some states, Maryland's marketplace does offer PPO plans, providing more flexibility in provider networks. The choice of plan type often depends on your preference for network flexibility versus premium cost. St. Mary's County, with a population of 115,126, is part of Maryland Rating Area 1, which covers Allegany, Anne Arundel, Baltimore, Baltimore, Calvert, Caroline, Carroll, Cecil, Charles, Dorchester, Frederick, Garrett, Harford, Howard, Kent, Montgomery, Prince George's, Queen Anne's, Somerset, St. Mary's, Talbot, Washington, Wicomico, Worcester counties. The county's median income is $119,446, and its uninsured rate is 3.9% per U.S. Census Bureau ACS 2024 5-year estimates. St. Mary's County has no acute care hospitals within its boundaries, meaning residents needing acute care typically travel to neighboring counties.

How the Deduction Works with Marketplace Subsidies

Many self-employed individuals in St. Mary's County qualify for advance premium tax credits (APTCs) when purchasing health insurance through Maryland Health Connection. These subsidies directly lower your monthly premium payments. The self-employed health insurance deduction still applies even if you receive an APTC. You can deduct the portion of the premiums you pay out-of-pocket after the subsidy has been applied. For example, if your monthly premium is $600 and you receive a $400 subsidy, you pay $200 out-of-pocket. You can then deduct the $200 per month (or $2,400 annually) on your tax return. This mechanism allows self-employed individuals to benefit from both premium assistance and a tax deduction, making coverage more affordable. Maryland Medicaid (also known as HealthChoice) is another option for lower-income self-employed individuals. Maryland expanded Medicaid in 2014, making adults with income up to 138% of the Federal Poverty Level (FPL) eligible for comprehensive, no-cost health coverage. Pregnant women in Maryland can qualify for Medicaid with incomes up to 250% FPL, and children can receive coverage through the Maryland Children's Health Program (MCHP) up to 300% FPL. If you qualify for Maryland Medicaid, you generally would not be paying premiums and thus would not have a deduction to claim.

Health Insurance Carriers in St. Mary's County

For 2026, 4 carriers offer marketplace plans in Rating Area 1, which includes St. Mary's County. These carriers provide a variety of plan options across different metal tiers (Bronze, Silver, Gold, Platinum):

CareFirst BlueChoice
CareFirst of Maryland
Optimum Choice
Wellpoint

When selecting a plan, consider factors beyond just the premium, such as the deductible, out-of-pocket maximum, copayments, coinsurance, and the provider network. A licensed agent can help you navigate these choices and find a plan that aligns with your health needs and financial situation.

Making the Right Decision for Your Coverage

Choosing the right health insurance plan as a self-employed individual in St. Mary's County involves balancing cost, coverage, and tax benefits.

If your income is below 138% FPL, explore eligibility for Maryland Medicaid (HealthChoice) through Maryland Health Connection.
If your income is between 100% and 400% FPL (or higher, depending on household size and plan costs), you will likely qualify for significant advance premium tax credits (subsidies) on Maryland Health Connection. Enhanced Silver plans may offer additional cost-sharing reductions.
If your income is higher and you do not qualify for subsidies, you can still purchase a plan through Maryland Health Connection or directly from an insurer and claim the self-employed health insurance deduction.

A licensed health insurance producer can provide personalized guidance, helping you understand your subsidy eligibility, compare plans from CareFirst BlueChoice, CareFirst of Maryland, Optimum Choice, and Wellpoint, and ensure you're maximizing your tax deduction opportunities.

Frequently Asked Questions

Who qualifies for the self-employed health insurance deduction in St. Mary's County?

To qualify, you must be self-employed (e.g., a sole proprietor, partner, or more-than-2% S-corp shareholder), not eligible to participate in an employer-sponsored health plan, and have net earnings from self-employment. The deduction is for premiums paid for yourself, your spouse, and your dependents.

Can I deduct marketplace health insurance premiums if I get a subsidy?

Yes, you can deduct the portion of your health insurance premiums that you actually pay out-of-pocket, even if you receive an advance premium tax credit (subsidy) through Maryland Health Connection. The deduction applies to the net amount you are responsible for after the subsidy is applied.

What types of health plans are available for self-employed individuals in St. Mary's County?

In St. Mary's County, self-employed individuals can choose from various plan types on Maryland Health Connection, including Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Exclusive Provider Organization (EPO) plans. The specific options and their costs will depend on your income and household size.

Does the self-employed health insurance deduction reduce my self-employment taxes?

No, the self-employed health insurance deduction is an above-the-line deduction, meaning it reduces your adjusted gross income (AGI), which in turn lowers your income tax liability. However, it does not reduce your net earnings from self-employment for purposes of calculating self-employment taxes (Social Security and Medicare taxes).