Health insurance premiums on a 1099-NEC

[SONDREW1]

I am retired, but continue to act as a consultant for my prior job.  My prior employer provides me with health insurance through their group plan, for which I receive a 1099-NEC for the amounts that they paid on the premiums.   This is the only income reflected on the 1099-NEC.  So my thinking is that I have a business income (the amount the company paid for my premiums as indicated on the 1099-NEC), and a business expense (the amount I paid for the premiums) that are equal, and which should cancel each other out.  However, when I enter the expense of the premiums under the "self-employed health insurance premiums", Turbo Tax calculates self-employment taxes based on the amount of the 1099-NEC.  In contrast, when I enter the expenses using the "Enter Business Expenses Not Yet Reported" page, all self-employment taxes disappear, and I have a savings of over $3000.  So why don't I get the same result when using either entry?  Is this a bug in the TurboTax program?  I would think the default entry of a user would be under the "self-employed health insurance premiums", but I question the results.  

[MinhT1]

If you receive a form 1099-MISC for Health insurance premiums, then you aren't considered as self-employed and don't need to file a Schedule C. There's no self-employment tax and these health insurance premiums aren't deductible as Self-employed health insurance premiums, but as Medical expenses if you itemize deductions.

In TurboTax, enter your form 1099-MISC and follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only receive the 1099-MISC only in 2023, not in previous years, and not in 2024, you will then have the screen where you can say that it didn't involve an intent to earn money.

[SONDREW1]

Thanks for the response, but I received a 1099-NEC, not a 1099-MISC.  

[MinhT1]

If you receive a form 1099-NEC, enter it as a 1099-NEC and proceed likewise with the interview in TurboTax to indicate that there is no intent to earn money.

[dmertz]

The health insurance that you are provided is non-employee compensation and is income from self-employment.  The sum of the deductible portion of self-employment taxes and the deduction for self-employed health insurance is not permitted to exceed net profit from self employment.

Health insurance is a business expense on Schedule C only for those payments made for non-owner employees, of which you have none.  The reason that impermissibly entering as a business expense the amount paid for your health insurance makes a difference is that it inappropriately eliminates your self-employment tax.

Finally, it seems unlikely that the insurance provided by your former employer qualifies as being eligible to be claimed as a self-employed health insurance deduction.  To be eligible, the insurance must be in your name or the name of your business.  The amount can instead be claimed as a medical expense on Schedule A if you itemize.  From the instruction for line 17 of Form 1040:

The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business.  If you are filing Schedule C or F, the policy can be either in your name or in the name of the business.