Deduction for Self Employed Health Insurance bought through Marketplace

Forum|Forum|2 years ago
March 25, 2024
2 replies
0 views

I own a business (S-corp so I get K1) and paid for Health insurance that I bought through NY State Marketplace. I entered 1095-A info as TurboTax requested and it calculated the credit correctly. However the rest of the the deduction doesn't go to line 17 Schedule 1 in order to get deducted from Business income. It goes into regular "Medical Expenses" that need to itemized and I subject to 7.5% of AGI rules. I tried to edit line 17 manually through Forms but TurboTax doesn't let me do so. Is that a bug? I'm using TurboTax Home & Business 2023.

Thanks

TurboTax Home & Biz Windows

Best answer by CatinaT1

This is a know issue. You can sign up for updates here: Why isn't my MAGI on Form 8582 not including my full self-employment health deduction?

MinhT1

As a greater than 2% shareholder of a S-Corp, your health insurance premiums may be deductible as Self-employed health insurance.

To claim this deduction, the health insurance premiums must be paid or reimbursed by the S corporation and reported as taxable compensation in box 1 of your W-2.

Revisit your K-1 entry until you get to the page Describe this Partnership. Check the box I personally paid health insurance and/or long-term care insurance premiums for myself and my family. and click Continue.

On the next page, enter only your Medicare Wages (box 5 of your form W-2), but do not enter your Marketplace premiums here. The Marketplace premiums are entered in the 1095-A section.

Then revisit the entry of your form 1095-A.

After entering your form 1095-A, you will come to a page titled Let us know if these situations apply to you?. Put a checkmark on I'm self-employed and bought a Marketplace plan and click Continue.

On the next page Which business was associated with this policy?, put a checkmark on Income from my S-Corporation and choose your S-Corp and the beginning and ending months of activity of your S-Corp.

Please note that the premiums are deductible only if you are a more than 2% shareholder of your S-Corp and you receive a form W-2 from your S-Corp, and they are deductible only up to the amount of your share in the profit of the S-Corp as reported on your K-1.

Please read this TurboTax Help article for more information.

@MegaX8

[Edited 3/25/24 | 11:28 AM PST]

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

MegaX8Author

It specifically says that I shouldn't enter any info there if I bought health insurance from the Marketplace.

VolvoGirl

Employee

Did you check the box for self employment when you entered the 1095A?

You only enter it from the 1095-A. When you enter the 1095A there should be a box to check for self employment. If you enter the 1095-A and select the "Self-employed and bought a Marketplace plan" box, it will automatically include those premiums in the SE Health Insurance section. So you shouldn't enter it again on schedule C.

MinhT1

Were you paid a salary or wages by the S-Corp and did you receive a form W-2 from the S-Corp?

To be deductible, the health insurance premiums must be paid or reimbursed by the S corporation and reported as taxable compensation in box 1 of your W-2.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"