Self-employed health insurance, spouse coverage, and 1095-A

[vdawg]

I am self-employed (LLC, taxed as sole propietor).  I purchased health insurance through Ambetter, but I believe it's a "marketplace" policy as I received an 1095-A with a marketplace-assigned policy number in box 2.

I also got married in March 2019.  My spouse had her own health insurance from her employer through August 2019, so for Jan-Aug 2019, I paid only for my own health insurance.  For Sept-Dec 2019, I added her to my policy and paid for both. 

QUESTION 1:

My understanding is I can't claim my health insurance premiums as a deduction during the months we were married AND I was eligible to be on her policy, which would be April - August 2019.  But I should be able to claim my premiums for Jan - Mar 2019 and Sept - Dec 2019.  is this correct?

But my 1095-A has entries for all my premiums for each month.  It has 0 for advance payment of premium tax credit which I'm not eligible for because my business income is high enough.  When I enter it in TT, do I enter everything on the 1095 document I have exactly as it is, even though some months wouldn't qualify due to being married and being eligible for coverage under my spouse's plan?

Also, I entered my 1095-A (all months as it's provided) in TT under Personal->Deductions & Credits->Medical->Affordable Care Act (Form 1095-A).  When I do this, I check the box "I'm self employed and bought a marketplace plan."  I also check the box "I got married in 2019" and select "March" for the month.  I then select myself as the primary policy holder.  On the next page, I choose the business (my only business) associated with the policy, and select "January" as the first month the business operated and "December" as the last month the business operated.

At this point, I have no idea if I've somehow claimed health insurance premium deductions for months I am not eligible to because I got married and was eligible for coverage under my spouse's plan for part of the year.  Entering my 1095-A information does make my refund increase, so I know it is counting as a valid deduction.   Although it asked when I got married in 2019, it just never asked me for any months where I was eligible for my spouse's health insurance so it could exclude them. I'm afraid it's not accounting for that and giving me too high of a deduction. 

QUESTION 2:

How can I ensure that TT is only counting the health insurance premiums I paid for months I was *not* eligible for my spouse's plan?

Thanks!

[AmeliesUncle]

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@vdawg wrote:

QUESTION 1:

My understanding is I can't claim my health insurance premiums as a deduction during the months we were married AND I was eligible to be on her policy, which would be April - August 2019.  But I should be able to claim my premiums for Jan - Mar 2019 and Sept - Dec 2019.  is this correct?

But my 1095-A has entries for all my premiums for each month.  It has 0 for advance payment of premium tax credit which I'm not eligible for because my business income is high enough. 

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Correct, you can only claim the Self Employed Health Insurance deduction for the months you were not eligible for employer-subsidized health insurance.

Are you SURE your income is too high for the Premium Tax Credit, even with a larger Household Size (your new spouse)?  If so, don't bother to enter the 1095-A at all.  In the business section where you enter your business information, there is a subsection about insurance.  One of those areas ask about your personal health insurance cost, and just manually enter the proper amount there.

[ThomasM125]

Your are correct, you can only deduct the health insurance premiums for the period of time you could not be on your spouse's plan.

Vinne has a point regarding entering the health insurance amount that is deductible if you don't need to worry about the premium tax credit. Just because you didn't use it during the year, doesn't necessarily mean you are not due a refund for it based on your income. If you know you are not do a premium tax credit, then I would follow his advice.

However, you may get a request after you file the tax return to provide a completed form 8962, but you can do this after you file your return if necessary.

[vdawg]

Thanks for the quick reply.  If I delete my 1095-A and then go to Business->Business Income and Expenses->Choose what to work on->Less Common Business Situations->Self Employed Health Insurance and click Update, it displays a screen that says "Self-employed health insurance must be entered under each corresponding business, farm, partnership, or S corporation -1 topic to which the insurance payments apply.  If you paid health insurance premiums for yourself or your family, locate the appropriate business activity on the topics list and enter your insurance premiums there."  Clicking Continue takes me back to the previous page.

From there I go to Business Income and Expenses and click Update, then click Edit next to my business, then scroll down to Business Expenses section and then click Update next to Other Common Business Expenses.  On the business expenses page, I scroll down to Insurance Payments  and click Update.  The next page has an item for Health Insurance Premiums. 

But on the Learn More popup screen from this page, it says "Do not include health insurance purchased through a Health Insurance Marketplace (also known as an exchange). These premiums are entered on Form 1095-A in the program."

Since I received a 1095-A,  is this still the correct place to enter premiums for this type of plan?

Thanks again!

[CatinaT1]

This does not answer your entire question, but if you have a 1095-A, you MUST enter it.  Generally if you don't include it, your return will get rejected looking for the Premium Tax Credit form that it generates.

[AmeliesUncle · Accepted solution]

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@CatinaT1 wrote:

This does not answer your entire question, but if you have a 1095-A, you MUST enter it.  Generally if you don't include it, your return will get rejected looking for the Premium Tax Credit form that it generates.

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No.  He said there was no Advance Credit in column C, so if does not qualify for the credit there is no need to enter it in the program.

Vinnie, yes you can enter it there.  It says that because IF you did qualify for the Premium Tax Credit (or had Advance payments in column C), then you would not enter it there and ONLY enter the 1095-A.  But because your situation does not require you to enter the 1095-A, it is easiest just to enter it one that screen you found.

[vdawg]

Ok, thanks.   So when I enter my paid premiums under the business expenses area, I just enter the total premium amount for the months that I wasn't married and/or my spouse was not employed, correct?

I did find it odd that Turbo Tax didn't have a question-and-answer section (knowing I was married and  self-employed) that asks if there were any months that I was eligible for my spouse's plan, so it could then ask which months and what the premiums were that I paid during those months so it could calculate the proper amount that can be legally deducted.  I did do the walk-through method, but I don't remember being asked anything like that.

Anyway, thanks again for taking the time to address my complicated case.   I really appreciate the assistance!

Sincerely,

Vinnie

PS: I found this statement on the healthcare.gov website regarding the 1095-A and premium tax credit form:

If you paid full price and are sure you don't qualify for a premium tax credit

• You don’t have to fill out or include Form 8962, Premium Tax Credit, when you file your federal taxes.
• Keep your Form 1095-A with your other tax records.

[AmeliesUncle]

You are welcome.

You are right, the section of TurboTax is severely lacking in MANY respects.

[vdawg]

Sorry - one more question now that I'm entering this deduction in the "business deductions" section of TT:

I didn't pay these premiums from my business account, I paid them with my personal funds.  Does that matter?

For things like business supplies and equipment, I always buy them directly with a business credit card and pay that card from the business checking account, but health insurance premiums have been paid for using my personal credit card each month.  Does that make them *not* business expenses or not proper for entry in that section of TT?

[AmeliesUncle]

That is fine.  You can still enter them there.

[vdawg]

Awesome -- thanks so much (again).