K1 1120S box 17 AG: Health Insurance Deduction

[Driven to Distraction]

How do I get the subtraction on line 16 of Form 1040, schedule 1 to populate from the amount on form K1, 1120S, Box 17, code AD? The instructions say to populate boxes in the K1, Form 1065 but say nothing about what to do for K1, 1120S in this situation.

[DavidD66]

The reason there is no information on what to do for Health Insurance reported on a K-1 for a more than 2% shareholder of an S-Corp is because they can't be reported on Form K-1 and deducted by the shareholder.  The premium payments must be reported as wages subject to income tax on the shareholder's W-2.  They are also reported in Box 14 as other information.  

Shareholder premiums cannot be reported on Schedule K-1 and deducted.  Shareholder premiums cannot be reported on Form 1099-MISC and deducted.  Shareholder premiums cannot be unreported and deducted.

[Driven to Distraction]

Where in the interview does the software ask about my percentage ownership for form 1120-S? I can't find/revisit the question, nor is there an opportunity to check off whether or not I paid my own health insurance premiums - is this asked somewhere else?  The guidance on this topic also only seems to refer to form K-1/1065; it doesn't mention 1120 even though it is phrased as if it applies to both forms. See "Get info on the self-employed health insurance deduction for partners and LLC members"

[Irene2805 · Accepted solution]

In the interview for the K-1 from an S-Corp, the screen asking for percent of ownership is about three screens into the interview and comes right after the screen asking for the S-Corp identification Number.  [See Screenshot #1 below.]

To enter the health insurance premiums you paid, follow these steps:

1. Go back into the K-1S entry portion of the interview.
2. You will come to a screen, Other Situations.
3. Mark the box I personally paid health insurance... [Screenshot #2]
4. Enter the premiums paid on the next screen, Self-Employed Insurance Costs.  Click Continue.    
5. On the next screen, you will have the opportunity to enter any long-term care insurance costs. 
6. You will be brought back to the S-Corporation K-1 Summary.  Click Done if you have no additional K-1s to enter.

Screenshot #1

Screenshot #2

@Driven to Distraction

[Driven to Distraction]

Thanks - best answer.  I do think the official help answer that you get when you follow the instruction to "search and follow the advice" directions for Box 17/AG regarding owner/employee paid premiums for >2% owners could be clearer, for sure.

[balbie22]

Thanks for the description above, one additional question for this.  Can the insurance premiums be listed even if the K-1 doesn't reflect Box 17 AD code?

[DaveF1006]

Yes, if you personally paid health insurance that was added to wages paid by the S-Corp, you may claim these without being reported on the K1. 

1. Go back into the K-1 entry portion of the interview.
2. You will come to a screen, Other Situations.
3. Mark the box I personally paid health insurance.
4. Enter the premiums paid on the next screen, Self-Employed Insurance Costs.  Click Continue.    
5.  You will eventually be brought back to the S-Corporation K-1 Summary.  Click Done if you have no additional K-1s to enter.

@balbie22 

[BDN23]

When entering "Self-Employed Insurance Costs".  It says not to enter premiums if you paid Healthcare.gov or marketplace but you can enter the premiums if you paid another provider.  I get insurance through the marketplace but pay my premium's portion (not my wifes) directly to Banner Aetna which is their provider.  Can I enter the premium since paying Banner direct? 

If not, where do I deduct my reimbursed premiums since I am a 100% single owner SCorp?  The K1 box 17 AD code drop down from the instructions is missing in Turbo Tax?  A bit confusing.

One last thing, can I also include my wifes premium portion to my rembursement and deduct it as long as I include it on my W2?

Appreciate it!

[RobertB4444]

Did you receive a form 1095-A from the marketplace?  If not, then just enter your premiums as health insurance premiums and you're all set.  

If you did receive a 1095-A from the marketplace it should have included the premiums that you paid on the form.  Whether you pay them directly to the insurance company or not doesn't really matter.  You'll enter them along with all of the other information on the 1095-A into that interface and the system will assign your premiums to the self-employed health insurance deduction section.

The 1095-A should be a family plan which includes your wife and any premiums she pays as well.

@BDN23 

[Amy S]

I am using the desktop version of Turbotax and trying to enter my K1 information from an s-corp of which I am a 51% owner.  I deleted the transferred K1 from last year and entered it again to make sure it was capturing all the new fields.  I checked the box on the other situations for "I personally paid health insurance..." and filled in the number on the screen.  There is no AD or AG code on my K1, nor is this code available to enter in turbotax under the box 17 screen.

The amount I paid in premiums is being transferred to the Medical Expenses form (subject to a minimum of percentage of AGI) rather than an an above the line deduction and is having no impact at all on my taxes owed.  I can put in $0 or $16000 and it is not changing my taxes in any way. 

[PatriciaV]

Since you are using TurboTax for Desktop, you can track the flow of this entry from the K-1 to your 1040.

1. Open your return and click on the Forms icon in the TurboTax header.
2. Scroll down the forms list on the left column and find "K-1 SCorp" for the K-1 you entered.
3. Click on the form to open it in the large window. Verify your entries match the original K-1.
4. Also open "K1S Addl Info 1" and Form 7206 under the K-1.
5. Switch to the K1S Addl Info 1 form and scroll to the bottom.
6. Both Line 1 (premiums) and Line 2 (W-2 wages) should have entries.
7. Switch to Form 7206 and scroll to the bottom.
8. Line 14 shows your SE Health insurance deduction. Note that Line 14 flows to Schedule 1 Line 17 and not to Schedule A (Itemized Deductions). You can open Schedule 1 to confirm.

If the SE Health insurance deduction isn't being carried over the Schedule 1, you may need to review your entries for the K-1 again.

[Amy S]

Thank you.  I was missing the wages in the form.  I went to the form directly when I opened TT and now I see the wages in the interview also.  I'm not sure if I missed the entry for wages when going through the interview on the first 3 tries (seems unlikely, but possible) or if TT didn't transfer it to the form.