Question

COBRA assistance for self-employed

Forum|Forum|4 years ago
April 11, 2022
1 reply
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I am self-employed and received cobra premium assistance during COVID. Since the premium assistance is excluded from income for FIT purposes, I only deducted the premiums I actually paid. E.g., if health insurance premiums are $100/mo, and I got 6 months of premium assistance, I reported $600 worth of deductions and not $1200.

Assuming that is correct, when I need to report the premium assistance as income in California, do I then get an offsetting deduction for that amount ($600 in the example above)? If so, how do I adjust the health insurance payments made to reflect the full amount owed ($1200) just for california?

J

JohnW152

Yes, you’ll need to include the $600 exclusion from your federal return as income on your California return.

To do this, when you’re going through the California interview in TurboTax:

The initial health insurance questions, starting with Did you both have health insurance coverage in 2021?, won’t address the COBRA issue. Answer those questions fully, then continue through the interview.
Eventually, you’ll come to the Here's the income that California handles differently screen.
Scroll down to Medical, then select Start to the right of COBRA Premium Assistance.
On the Enter COBRA premium assistance subsidies excluded from federal income page, enter the amount excluded from your federal return, then select Continue.

Please see COBRA premium assistance in the 2021 Instructions for Schedule CA (540)California Adjustments for more information.

Z

Zoltan2016Author

Thank you, @JohnW152 . Are you suggesting that by doing that Turbotax will make the approrpriate adjustment to the deductible amount? It does not seem to be doing that. Or are you suggesting that California does not offer a corresponding deduction?

DaveF1006

Yes, California does not conform with Federal Law and allow an exclusion for Cobra premiums. If you follow the advice given by johnW152, the premium assistance should be added back a income into your California return.

@Zoltan2016

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