I am assumed a 2% s-corp owner but am not. How do I deduct my health insurance premiums?

[Abbeysis]

I am the child of the owner of the company I work for so the IRS assumes I am at least a 2% owner of their s-corp, but I am not.   As a result, I am not allowed to pay my health insurance premiums pre-tax but have always been able to deduct them on my taxes.  For the life of me, I can't figure out how to do it on TurboTax this year.

I also can't remember how I did it last year.  Previous to 2023, I just made a k-1 for the company and listed the premiums there.  Is that what I should do?

Thanks for any help you can give.

[ThomasM125]

If you are a 2% owner or considered as such, you would need wage income from the S corporation in order to deduct your self-employed health insurance premiums properly. The corporation would deduct the insurance on the corporate tax return, then it would be added to your wages in box one on your W-2 form. Then you would deduct it on your personal tax return as self-employed health insurance. So, the deduction would appear on the corporate return and you'd get your share of it by virtue of a smaller income reported on your K-1 schedule.

The short answer to your question however, is that you will be asked when you enter your K-1 schedule in TurboTax if you paid health insurance for yourself and the corporation paid you wages on the screen that says Other Situations:

If you check that box, on the next screen you can enter your premiums to get the deduction. Also, if you have insurance through the government healthcare exchange, when you enter your Form 1095-A you will be asked if it is associated with self-employed health insurance, and you will have an opportunity to link the insurance to the corporation at that time.

[Abbeysis]

Thank you for your help.  I am not an owner (my dad is) so I don't receive a K-1 from the company.  I am a full-time employee and the amount is listed on my W-2.

Last year, there was a specific place in Turbotax for me to input this information without a K-1 but I'm unable to find it this year. 

[Mike9241]

The determination of 2% shareholder status includes indirect ownership through family attribution rules. Under Section 318 of the Internal Revenue Code, stock owned by certain family members—spouses, children, grandchildren, and parents—is considered owned by the shareholder. A shareholder owning less than 2% directly may still qualify as a 2% shareholder if their family’s combined ownership exceeds the threshold.

is the health insurance included in box 14 or box 12DD?

if box 14, were your wages grossed up for the health insurance?

another possibility is that your share of the insurance was deducted from your paycheck. Box 1 of your w-2 was reduced for your payments and thus you are not entitled to any further deduction. 

you need to talk to your company to get the details concerning your health insurance.