Health insurance premium deduction for S-Corp shareholder by family attribution

Forum|Forum|2 years ago
February 25, 2024
1 reply
0 views

I work for an S-Corp where I am a 2% shareholder by family attribution only (no actual ownership). Therefore I do not receive a K-1. My health insurance premiums are included on my W-2, and they are deductible just as for any actual shareholder, but there is nowhere in TT to do this outside of entering K-1 info. I have seen this question was posted once a few years ago, and the only suggestion was to create a "mock K-1" and then entering the premiums there. Trying this method does create the new 7206 and flows through to the correct place on 1040. However, it also creates a Schedule E (p. 2), listing the S-Corp entity and $0 income. The software will not allow me to delete the Schedule E. Has anyone tried this method in the past and had any issues with the IRS questioning it? The concern is I would be submitting a Schedule E for an S-Corp I don't have actual ownership in and do not have a K-1. Thanks in advance.

Best answer by PatriciaV

The accepted method to report health insurance premiums for an S-Corp shareholder by attribution is to use a "mock" Schedule K-1 with zero income. If the IRS has questions, you should have proof of the attributed ownership.