I have a K-1 from a Co. owned 100% by me. TT said I need to upgrade to TT Self Employed to deduct health insurance premiums, a Schedule 1 deduction. Why change from 2020?

[TW220]

Filed a 2021 1120s prior to 3/15/22 and all other 2021business expenses were on it. Made same health insurance claim in pr yrs, never had a problem. Seems as though it's programming error.

[MinhT1]

You do not need to upgrade to TurboTax Self-employed.

As a greater than 2% shareholder of a S-Corp, your health insurance premiums are deductible as Self-employed health insurance.

You can enter your health insurance costs when entering your form K-1.

Follow your K-1 interview until you get to the page Describe this Partnership. Check the box I personally paid health insurance and/or long-term care insurance premiums for myself and my family. and click Continue. On the next page, you can enter your health insurance premiums which will be transferred to Part II line 17 of Schedule 1 of form 1040.

[TW220]

Thank you for responding quickly.

You recommendation is what I did. Everything looked fine until the final review, when I received the following message from TT: 

To accurately complete your taxes, you need to upgrade to TurboTax Self-Employed.

Why do I need to upgrade?

You have Self-employed health insurance.

TurboTax Premier does not cover this situation

I think it may be a programming error in 2021? I've used TT for years and had the same K-1 and personally paid health insurance premiums and they mapped to schedule 1 without issue.  I don't have any personal business expenses - never used schedule C. 

Is there something else I could have done in TT to receive that message?

[MinhT1]

I have tested the program and get the same message. 

The upgrade requirement is new this year.

[TW220]

Thank you for checking - it confirms that something else I did generated the message. I really appreciate that.

I understand requiring an upgrade for someone using Schedule C. For a K-1, there's no other expenses to report. The K-1 represents the recipient's share of the business. 

Could it be a programming error on the part of TT rather than a new requirement?  In trying to communicate with TT on this issue with no luck. 

Do you know a way to get this issue in front of TT?

[AliciaP1]

The only way (for 2021) an S-Corp shareholder can claim the SE Health Insurance Deduction is if the premiums are either paid by the S-Corp or reimbursed to the Shareholder through the Shareholder's W-2 for 2021.  If the premiums are properly reported on the W-2, the Self-Employed version is not necessary.

Please see Can I deduct health insurance premiums as an S Corporation shareholder? for more information on how to record the deduction.

@TW220

[TW220]

Thank you.

How does one properly report the information on a w-2?

[AliciaP1]

The value of the premiums should be added to your taxable wages in boxes 1, 3 & 5 of the W-2, and then the correct Social Security and Medicare taxes withheld.

@TW220

[Tax Payer1]

I had the same problem this year (2021 return).  My health insurance premium was reported on the K-1, box 13M.  This is an LLC.  In past years TT Premium handled this without problem, but this year I have to upgrade to Self Employed.  Technically, I suppose the LLC paid the premium on my behalf and I did not pay personally.

[Tax Payer1]

This was Form 1065