qbteachmt
Level 15

"The client qualified for the premium tax credit in the prior year,"

The spouse? Qualifying for the PTC is not the same as applying to get in as Advance. One reduces your cost and is based on your projection; the other is a refundable credit on the taxes, that your MAGI has to qualify for as under 401% poverty level, and that is something you might do because you have no expectation that you would qualify for APTC.

"so they could not double dip and take both the PTC and the SE health insurance deduction."

Yes you can. But the SE deduction is based on the amount you paid and up to the reportable income from that Sched C activity (not taking SE tax into consideration). Any difference, if you qualify, is right on the 1040. And they do impact each other, but one does not exclude the other. That's because of the way the MAGI is affected.

"This year, they do not qualify for the PTC so they are allowed the SE Health insurance deduction."

They are not linked like that. Your business income entitles you to include health as the deduction, up to the point you've offset the income. The PTC is a refundable credit. Any unused premium costs would go on Schedule A and be subject to the floor. These are all different provisions.

"I talked to my client and they told me they paid less than what was in column A, so I used the amount they actually PAID as the amount for SE health Insurance deduction - I had to override in the software."

Try this article:

https://proconnect.intuit.com/community/review-taxes/help/calculation-of-se-health-insurance-deducti...

 

 

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