Turbo Tax did not deduct my Medicare Premiums from my Wisconsin tax return, thus increasing my state taxable income by almost $2K. How can I fix this?

[kandmmace]

My accountant says we can deduct our Medicare Part B premiums taken from our social security on Line 11 of our Wisconsin tax return.    However, Turbo Tax didn't do this.  This increases our Wisconsin taxable income by ~$2,000.  How can we make that happen and file an amended return?

[maglib]

Line 9 Social Security Adjustment Social security benefits are not taxable for Wisconsin. You may subtract any social security benefits that were taxable on your federal Form 1040. Fill in on line 9 the amount from line 5b of federal Form 1040.

Since the SS income was not taxable income, the medicare withheld then can not be a deduction as you were not taxed on the related income.  

see pages 17 and 18.

https://www.revenue.wi.gov/TaxForms2017through2019/2018-Form1-inst.pdf#page=17

The following amounts may not be included in the subtraction for medical care insurance: • Insurance premiums paid by an employer, including amounts paid by you through payroll deductions, unless the premiums are included as wages in box 1 of your Form W-2. • The amount of employer-provided medical insurance that is identified on your W-2 in Box 12 with Code DD. • Medical care insurance premiums that are deducted pre-tax.

CAUTION If you participate in your employer’s fringe benefit cafeteria plan and agree to a voluntary salary reduction in return for a medical care insurance benefit, you may not consider the amount of your salary reduction an amount you paid for medical care insurance. You cannot subtract premiums paid with money that has not been included in your gross income. These programs may be known as flexible spending accounts, employee reimbursement accounts, etc. Some employers may identify these amounts on your pay stubs as Internal Revenue Code sec. 125 or as a pre-tax deduction.

[heyo_speaker]

I was just wondering the same thing after reading the Form 1 instructions -- wondering whether Medicare premiums paid directly out of Social Security benefits can be listed as a subtraction on Line 11 -- because the Form 1 instructions say that premiums which are deducted pre-tax may not be included in the subtraction, and Social Security benefits are not taxable in Wisconsin.

However, after searching the Internet for a while trying to confirm this, I ended up realizing that just above this in the same instructions it says "If you are receiving Social Security benefits, the amount paid for medical care insurance INCLUDES the amount deducted from your monthly benefit for Medicare insurance (for example, Parts B and D)."

That seems to be pretty clearly saying that it is actually OK to include Parts B and D premiums paid via Social Security in this subtraction.

(I assume they knew most people would be also subtracting their Social Security income from taxable income via Line 9, and are saying that they may also subtract those Parts B and D premiums in Line 11 regardless.)

maglib or anyone else, am I interpreting this wrong, or not thinking of something?

If I am correct, does this mean there is an error in the TurboTax software?  I didn't use it for my dad's taxes this year, so I don't know if it would have given him the subtraction or not.  But apparently it did not give kandmmace the subtraction.

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....There is a possible weird interpretation of the instructions in which maybe the premiums should NOT be included in the subtraction.  Maybe they are just saying that Parts B and D premiums paid via Social Security are included in their definition of the term "medical care insurance", but are not trying to imply that this means you can subtract them.  But then why would they even state that here in the first place?  So it seems like that would be a weird interpretation.

Or maybe some people DIDN'T subtract Social Security benefits via Line 9 for some strange reason (also very weird), but still want to subtract the insurance premiums paid via Social Security benefits?  So therefore instructions needed to say, "yes, Parts B and D premiums count as "medical care insurance" and can be subtracted, but not if you also subtract your Social Security benefits because they are pre-tax"?  This explanation and interpretation also seems too weird.  But I'm not an expert.