Updated November 4, 2026. Quick answer: Worksheet P in Publication 974 (2025) is a three-line IRS worksheet that finds the self-employed health insurance deduction for nonspecified premiums, the premiums you cannot claim the premium tax credit for, such as coverage that is not a qualified health plan or the share of a premium for people outside your coverage family. Line 3 is the smaller of the premiums on line 1 and your net profit and earned income on line 2. If line 2 is not more than line 1 you stop there, otherwise you go on to Worksheets W and X.
When Worksheet P applies
It is the first step for a self-employed filer who has a Marketplace plan. The publication’s instruction is “If you have health insurance premiums for which you cannot claim the PTC (see Nonspecified premiums, later), first complete Worksheet P or, if required, Form 7206 but only with respect to those premiums.” It also says when to skip the later sheets: “Skip Worksheets W and X if either of the following applies.” The two cases are “You completed Worksheet P and line 2 is less than or equal to line 1.” and “You completed Form 7206 and line 13 is equal to or less than line 3.” The other worksheets in the series are Worksheet W and Worksheet X. The Form 8962 instructions send self-employed filers here: “If you are claiming the self-employed health insurance deduction, see Pub. 974.”
Lines 1 to 3
| Line | What it asks |
|---|---|
| 1 | “Enter the total amount of nonspecified premiums paid in 2025 for health insurance coverage established under your business”. The sheet adds that coverage can include “your child who was under age 27 at the end of 2025, even if the child was not your dependent”, but “do not include amounts for any month you were eligible to participate in an employer-sponsored health plan” |
| 2 | “Enter your net profit” and other earned income from the business under which the plan is established, “minus any deductions on lines 15 and 16 of Schedule 1 (Form 1040).” “Do not include Conservation Reserve Program payments exempt from self-employment tax.” |
| 3 | “Self-employed health insurance deduction for nonspecified premiums. Enter the smaller of line 1 or line 2.” “Do not include this amount in figuring any medical expense deduction on Schedule A (Form 1040)” |
After line 3 the sheet routes you: “If line 2 is equal to or less than line 1, stop here.” The amount goes “on line 17 of Schedule 1 (Form 1040)”, and Form 8962 handles the credit for the specified premiums. “If line 2 is more than line 1, complete Worksheet W.” “Also, complete Worksheet X if APTC was paid to your insurer on your behalf for the months you were self-employed.”
Which premiums are nonspecified
The publication defines the term in two parts: “A premium for health insurance coverage established under your business (or the S corporation in which you were a more-than-2% shareholder) but paid for coverage in a plan that is not a qualified health plan.” and “The portion of the premium for coverage in a plan that is a qualified health plan established under your business (or the S corporation in which you were a more-than-2% shareholder) but that is attributable to individuals not in your coverage family.” Its examples of nonspecified premiums include “Premiums paid for a qualified health plan other than during a coverage month.”, “Dental insurance premiums.” and “Premiums for qualified long-term care insurance.”
The publication’s own illustration: “This $3,000 premium is a nonspecified premium because it is for coverage under a plan that is not a qualified health plan.” It is entered on line 1 of this sheet.
Splitting one plan between family members
When a plan covers people outside your coverage family, the publication says to multiply the enrollment premiums by a fraction: “The numerator of the fraction is the premium for the applicable SLCSP for your coverage family.” Its example is Gary, with an enrollment premium of $15,000, a $12,000 benchmark premium for his coverage family and a $6,000 benchmark premium for Sue, who is not in it.
| Step | Result |
|---|---|
| Specified premiums (computed) | $15,000 x ($12,000 / $18,000) = $10,000 |
| Nonspecified premiums left for line 1 of this sheet (computed) | $15,000 minus $10,000 = $5,000 |
Those are the publication’s two figures: “The result is $10,000 ($15,000 enrollment premium x ($12,000/$18,000)) of specified premiums”, and “The remaining $5,000 of enrollment premium” “is attributable to Sue’s coverage and is a nonspecified premium”.
When Form 7206 replaces the worksheet
Some filers skip Worksheet P. The publication says “Use Form 7206 instead of Worksheet P to figure your deduction for nonspecified premiums if any of the following apply.” The three triggers are “You had more than one source of income subject to self-employment tax.”, “You file Form 2555.” and “You are using amounts paid for qualified long-term care insurance to figure the deduction.” After Form 7206 the stop rule is “If line 13 is equal to or less than line 3, stop here.” The ordinary deduction worksheet in the Form 1040 instructions is on the self-employed health insurance deduction worksheet page.
Example with invented numbers
Illustration, not an IRS example. The premiums are the publication’s $3,000 daughter-coverage figure. Every result is computed from invented inputs. Net profit is invented: after the deduction on Schedule 1 lines 15 and 16 the business has $41,000 of earned income.
| Line | Entry | Amount |
|---|---|---|
| 1 | Nonspecified premiums paid (the publication’s own $3,000 daughter-coverage example) | $3,000 |
| 2 | Net profit and earned income from the business (invented, after lines 15 and 16 of Schedule 1) | $41,000 |
| 3 | Smaller of line 1 or line 2 (computed) | $3,000 |
Line 3 is $3,000. Line 2 is more than line 1, so the sheet sends the filer on to Worksheets W and X for the specified premiums.
Illustration, not an IRS example. Now suppose a weaker year: $5,200 of nonspecified premiums and only $2,000 of earned income after lines 15 and 16.
| Line | Entry | Amount |
|---|---|---|
| 1 | Nonspecified premiums paid (invented) | $5,200 |
| 2 | Net profit and earned income, after lines 15 and 16 of Schedule 1 (invented) | $2,000 |
| 3 | Smaller of line 1 or line 2 (computed) | $2,000 |
Line 3 is $2,000, the earned income, not the premiums. Line 2 is less than line 1, so the filer stops here, enters $2,000 on Schedule 1 line 17 and uses Form 8962 for the specified premiums.
Edition
This page reads Publication 974 (2025), Premium Tax Credit (PTC), the file irs.gov served on 2026-11-04 (sha256 in the kit data). Line numbers and letters belong to that edition, so check the label printed on the worksheet in your own copy before you follow a line reference.
Common mistakes
- Putting a specified premium on line 1. Premiums for a qualifying plan for the months you were self-employed belong on Worksheet W, not here.
- Using Worksheet P when Form 7206 is required. A second source of self-employment income, Form 2555 or long-term care premiums send you to the form.
- Counting months you could have joined an employer plan. The line 1 instruction excludes them.
- Taking the line 3 amount into the Schedule A medical expenses as well. The sheet says not to include it there.
Related: Schedule 1 line 17, Publication 974, and Schedule 3 line 9.
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- Publication 974 (2025), Premium Tax Credit (PTC): https://www.irs.gov/pub/irs-pdf/p974.pdf
- Instructions for Form 8962 (2025), Premium Tax Credit (PTC): https://www.irs.gov/pub/irs-pdf/i8962.pdf
Read from the IRS documents linked above on November 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.