Affordable Care Act (Form 1095-A) - S Corp K-1
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patmag
Level 3

Affordable Care Act (Form 1095-A) - S Corp K-1

Hello. Me and my wife run an S Corp, we got 2x K1 from the company, we are shareholders and work for the company. We did not have payroll or W2. We had health insurance through Marketplace. I am not sure if I should check I'm self-employed and bought Marketplace plan. under Deductions & Credits -> Medical -> Affordable Care Act (Form 1095-A) tab.

 

Learn more link shows:

If you reported self-employment income on any of the schedules listed below and you used that income to buy health insurance through Healthcare.gov or your state Marketplace, you can deduct your premiums on your taxes. However, you need to tie that income to your 1095-A so we can properly calculate the deduction amount.

  • Schedule C – Self-employed business income
  • Schedule F – Farm income
  • Schedule K-1 partnership – This only counts if you earned self-employment income from that partnership, which means you would have an entry on Line 14 of your K-1 from that partnership.
  • Schedule K-1 S corporation – This only counts if you have a W-2 from that S corporation and are an owner with more than 2% interest in the S corporation.

According to this I should not select this box if I do not have W2. But does this apply in my case?

 

Thank you

6 Replies
DavidS127
Expert Alumni

Affordable Care Act (Form 1095-A) - S Corp K-1

Note that under the IRS rules, an S Corp taxpayer is eligible for the self-employed health insurance deduction only if the S Corp either pays the policy directly, or reimburses the shareholder for premiums paid directly by the shareholder (for a policy in the shareholder’s name).  In either case, the S Corp is required to include the health insurance premiums in the shareholder W-2 box 1 wages and report those health insurance premiums as wages on the Form 1120S.  When reported correctly, the self-employed health insurance premiums are already deducted from the income being reported as income on the shareholder K-1.

 

S Corps that have not complied with the IRS rules to report “more than 2% shareholder health insurance premiums” as W-2 wages need to file corrected W-2 forms for these more than 2% shareholders.  Also, the S-Corp should report these health insurance premiums for more than 2% shareholders as wages on Form 1120S and the shareholder K-1 as part of Section 199A wage reporting. If you have already filed Form 1120S for 2019, you'll need to file an amended return and use the Schedule K-1 forms from that amended Form 1120S. Note that only wages reported to the SSA within 60 days of the deadline are eligible to be counted as wages for QBI purposes.   

 

That being said, as you enter your K-1 from the S corp into your individual TurboTax, you will encounter the "Other Situations" screen.  On that screen, your check the "I personally paid health insurance..............." question.  When you check that box, on the next screen you will get a box to enter your Medicare Wages (box 5 of your W-2) from your S Corporation.   If you got your insurance from the Marketplace, don't enter the medical insurance premiums, they are already in TurboTax from your 1095-A entry.  Otherwise, when you enter your W-2 box 5 wages in that box and the amount of health insurance reported on your W-2 in the next box, your self-employed health insurance deduction should calculate correctly.

 

Here are the screens you look for to enter your self-employed health insurance amounts:

For more information, see these IRS websites:

 

https://www.irs.gov/pub/irs-drop/td-reg-107892-18.pdf

 

https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-i...

 

https://www.irs.gov/pub/irs-drop/rp-19-11.pdf

 

https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical...

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patmag
Level 3

Affordable Care Act (Form 1095-A) - S Corp K-1

How to do it if I did not have W2 from the corporation and I decide not to do it? K-1 is all I have from the S Corp.

DavidS127
Expert Alumni

Affordable Care Act (Form 1095-A) - S Corp K-1

There is not a way to do it correctly in TurboTax if you do not have a W-2 from your S Corp.

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waterbebe12
New Member

Affordable Care Act (Form 1095-A) - S Corp K-1

I'm trying to enter the health insurance deductions, but I don't get an "other options" screen under Schedule K-1 in the individual tax return, as seen in the screen shot that was shared. 

 

Do I need to be entering this info under self-employed, too? It seems duplicative since we have both a W2 and K-1 to enter the same info under self-employed. I'm lost on this one...

DavidS127
Expert Alumni

Affordable Care Act (Form 1095-A) - S Corp K-1

Despite the reference to "self-employed health insurance", neither the W-2 nor the K-1 are entered under the self-employed section of TurboTax.  The W-2 is entered in the "Wages and Salaries Form W-2" of Federal>>Income and the K-1 is entered in the "Business Investment and Estate/Trust Income" section of Federal>>Income.

 

That "Other Situations" screen should appear immediately after the last "box" screen you enter.  For example, if you have box 17 information on your K-1, the Other Situations screen come after after entering you box 17 info.

 

@waterbebe12

 

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Duhhead
New Member

Affordable Care Act (Form 1095-A) - S Corp K-1

Oh thank you. This is the answer I was searching for. We have a S Corp and personally pay health insurance through the marketplace but are reimbursed by the business because we are 20% owners. It’s always so confusing and we have to pay 100% of the marketplace cost of insurance and it only seems fitting that it would be a business expense at the very least. Thanks for helping me find the way to properly report it.

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