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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
1 Add the amounts in a and b and enter the total on Mass Form 1, Line 11 or Form 1-NR/PY, Line 15.  Medicare premiums deducted from social security benefits or retirement payments are not an allowable deduction since the benefits are not included in gross income. Self-employed individuals may deduct the employment tax paid during the taxable year up to a maximum of $2,000.