topic Self-Employed Health Insurance on K-1 Box 13 Code M shows wrong code - BUG ? in Business & farm

Self-Employed Health Insurance on K-1 Box 13 Code M shows wrong code - BUG ?

stua — Tue, 18 Feb 2025 00:19:37 GMT

On Turbotax Premier 2024, I am entering data from a K-1 from my S-corp.

I am following the instruction article by turbotax:

"How do I claim the self-employed health insurance deduction for partners and LLC members?"

The instructions are to enter the Self employed health care premiums (paid by the S-corp and reported on the W-2) on K-1 box 13 using code M. But the drop-down box in turbotax has code M as "credit for increasing research activities" but IRS says it should be "Code M. Amounts paid for medical insurance"

https://www.irs.gov/instructions/i1065sk1#en_US_2024_publink11396nd0e2460

https://ttlc.intuit.com/turbotax-support/en-us/help-article/insurance-medical-benefits/self-employed-health-insurance-deduction-partners/L1gYQG7n0_US_en_US?uid=m79qhp4b

Help !

Code M. Amounts paid for medical insurance.

Any amounts paid during the tax year for insurance that constitutes medical care for you, your spouse, your dependents, and your children under age 27 who aren't dependents. On Schedule 1 (Form 1040), line 17, you may be allowed to deduct such amounts, even if you don't itemize deductions. If you do itemize deductions, enter on Schedule A (Form 1040), line 1, any amounts not deducted on Schedule 1 (Form 1040), line 17.

Re: Self-Employed Health Insurance on K-1 Box 13 Code M shows wrong code - BUG ?

Mike9241 — Tue, 18 Feb 2025 08:17:00 GMT

For an LLC that elected S-corp reporting, self-employed health insurance is not reported on line 13 of the K-1. Rather, since it is taxed as an S-corp, it must follow the tax reporting requirements for that type of entity.

the SEHI should have been on line 7 or 8 of the 1120-S and box 1 of your w-2. it does not show up at all on the K-1 as a separate item

see this link

https://ttlc.intuit.com/turbotax-support/en-us/help-article/insurance-medical-benefits/deduct-health-insurance-premiums-corporation/L00Gt7nVn_US_en_US#:~:text=You%20may%20be%20able%20to%20use%20the%20Self-Employed,taxable%20compensation%20in%20box%201%20of%20your%20W-2.

so for the S-corp return the medical insurance should have been included on the same line as your wages

line 7 or 8 (line 7 since you are an officer)

for the w-2 the SEHI should have been included in box 1 (an addition to your wages)

and box 14 with a description like SEHI and the amount

you're going to have to file an amended 1120-s/K-1/ and w-2

otherwise, you're not in compliance with the tax laws and probably not entitled to deduct the SEHI on your 1040 or S-corp

Re: Self-Employed Health Insurance on K-1 Box 13 Code M shows wrong code - BUG ?

stua — Tue, 18 Feb 2025 20:56:27 GMT

Yes, the health ins premium paid by the S-corp/LLC is included in box 1 W-2 and there is a note on box 14 listing the amount of Health Ins Premium paid. It is also included in line 7 wages of 1120S. I have a note at the end of the K-1 with the health ins amount too.

The trick seems to be that I have to enter the premiums paid by the S-corp into the premiums paid box at the end of the K-1 questions.

When I follow the steps to enter the K-1 into my personal 1040, leaving "the amount of health insurance premiums I personally paid" as 0, the health ins premiums do not transfer to 1040 sch 1 line 17 and form 7206 is not generated.

However, when I enter the health ins premiums paid by the S-corp into the box "health insurance premiums I personal paid" then it flows to sch 1 line 17, and form 7206 is generated.