Can I deduct Health Insurance Premiums I pay for SAG-AFTRA Health Plan?

[Bruce-W]

I have an S-Corporation, which is a Signatory Producer with SAG-AFTRA.  This allows the S-corp to book SAG-AFTRA session work, paying its session vocalists who are affiliated with SAG-AFTRA wages based on SAG-AFTRA scale.  I am President and the sole Shareholder of my S-corp, and I'm also a SAG-AFTRA performer.  So my S-corp "loans me out" to production companies, who pay the S-corp. for my vocal services.  My S-corp in turn pays me (W-2 wages as an employee of my S-corp) for those sessions.  My S-corp also pays Health & Retirement contributions to the SAG-AFTRA Health & AFTRA Retirement Plans, the percentages of which is calculated based on the earnings I made for a given session.  If I, as a performing member of SAG-AFTRA, make enough "qualified earnings" on these SAG-AFTRA sessions in a given 12-month earnings cycle, I become eligible for participation in the SAG-AFTRA Health plan.  When I have qualified, at that point I am enrolled in 12 months of the SAG-AFTRA health plan, which then requires me to pay quarterly insurance premiums for the health coverage. SAG-AFTRA states the health play is "a self-funded ERISA plan and therefore not subject to state-mandated insurance laws."  I also have a Schedule C sole-proprietorship business.  My question is, may I deduct the quarterly health insurance premium payments I make as a self-employed  person, or even somewhere else on the Form 1040. since I have some schedule C income as well?

[MarilynG]

Yes, you can deduct your health insurance premiums as a self-employed person.

Click the link for more info on deducting health insurance premiums  if you are self-employed.

[Bruce-W]

Thanks, MarilynG. I'm self-employed, but, as ou can see from my question.  That's not the whole story.  I also earn W-2 for SAG-AFTRA sessions, and SAG-AFTRA is the organization that sponsors the multi-employer health plan, but ONLY if I earn a certain amount of wages in a year.  I qualified in 2017, so I enrolled in the SAG-AFTRA health plan.  But I still had to pay $375/quarter in premiums on that plan.  Since I also have unrelated schedule C income (and so does my wife) as a sole proprietor, am I allowed to deduct those quarterly insurance premiums on my schedule C, or even somewhere else on the 1040?

[MarilynG]

You can deduct them thru Sch C since you don't have an 'employer plan' thru payroll deduction or in Medical Expenses on Sch. A.

[Bruce-W]

Want to make sure.  I AM an employee through my S-Corporation.  And my S-corporation makes contributions to the SAG-AFTRA Health Plan on my behalf.  I then enroll in the SAG-AFTRA Health Plan.  Even with all that, I can STILL deduct my personal out-of-pocket quarterly insurance premiums (which, of course, also go to the SAG-AFTRA Health Plan)?

[Bruce-W]

But you're right.  Contributions by my S-corp for me as an employee are NOT made through a payroll deduction.  I guess that's why I can still take the Schedule C deduction on the premiums I pay out-of-pocket?  I just want to be clear that my S-corp. IS required to make Health & Retirement contribution remittances to SAG-AFTRA for me as an employee of my S-corp., even though they don't come through a payroll deduction.

[Bruce-W]

One other question then.  Could my wife claim the insurance premiums we pay on her Schedule C instead of mine?  She has more Schedule C income and thus more room for deductions before zeroing out her Schedule C income. There are other types of Sched. C deductions only I could take on my Schedule C, and that is why I ask.

[Bruce-W]

I ask all this, because of one sentence in the TurboTax help section, the link to which you sent me a few days ago.  It says this: Deduction eligibility rules

Eligibility is determined month-by-month
You can only claim the health insurance premiums write-off for months when neither you nor your spouse were eligible to participate in an employer-subsidized health plan.

[toureiffel]

Hello. I wanted to ask for a clarification on this advice, as I'm in a similar situation.

In Turbo Tax, under Self-employed Health Insurance, the guidance states: "If you or your spouse could participate (even if you declined coverage) in an employer's health plan at any time during a given month, you cannot take the deduction for that month. However, payments for those months are deductible on Schedule A if you itemize deductions."

It's not entirely clear to me what my situation is in relation to that guidance.

I have SAG-AFTRA Health Plan insurance that I qualify for due to W2 earnings for acting work, but I also file a Schedule C for a sole proprietor business related to other income. When hiring me as a performer, producers (my employers, for the purposes of my acting jobs) make contributions to the health plan, but no, I don't believe those contributions are deducted from my wages. For the purpose of taxes, then, am I not considered to be enrolled in an "employer's health plan"? Is my choice to participate in the SAG-AFTRA plan considered like any other private insurance for tax purposes, and not considered employer-provided insurance? Am I allowed, then, to claim a deduction for Self-employed Health Insurance under Business Expenses?

Thank you.

[ColeenD3]

I take it that SAG-AFTRA is your employer. 

1) You have W-2 income.

2) Your employers make contributions to your health plan.

3) You are eligible to participate in an employer-subsidized health plan.

For any of the months that you are eligible to participate, NO.

[toureiffel]

SAG-AFTRA is my union. It's the union that represents actors in film and television. When actors are hired for union jobs, the production company is considered the employer for the purpose of each particular job.  We're paid W-2 wages, and taxes are deducted from our checks. (Although I don't believe that anything is deducted from our wages that goes directly toward the health plan.)

The production makes contributions to the union's health plan. If an actor earns enough overall wages during a given year to qualify for participation in the union's health plan, then they can join the plan for that year, and must pay premiums. The union is not our employer, though. We have one or several employers, all of which are the production companies we work for. The health plan is administered by the union.

This is where my confusion lies. For tax purposes, I can't tell if this qualifies as an "employer health plan" or not.

[npierson7]

It its most likely "employer health plan". Your Form 1095 can provide more information. 

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