Link self-employed health insurance deduction to hybrid W2 form

[RogerP]

Form 1040 line 16 is where the self-employed health insurance deduction is entered but it currently needs to link to a K-1, Schedule C or Schedule F. How about adding a link for hybrid W2s which are given to religious workers.

[TaxGuyBill]

Maybe I'm missing something, but the Self Employed Health Insurance deduction would not apply if the worker is an employee with a W-2, even if they are clergy.

If they also have self employed income, then that would go in the usual spot on Schedule C.

[RogerP]

Publication 517 (2020), Social Security and Other Information for Members of the Clergy
and Religious Workers makes it very confusing. It states concerning Health Insurance Costs of Self-Employed Ministers:

"If you qualify, you can take this deduction as an adjustment to income on Schedule 1 (Form 1040), line 16. See the Instructions for Forms 1040 and 1040-SR to figure your deduction.

The following special rules apply to the self-employed health insurance deduction.

• You can't take a medical expense deduction on Schedule A (Form 1040) for any expenses you claim for purposes of the self-employed health insurance deduction."

These two statement seem contradictory. Which instruction do we follow for a clergy member who receives a hybrid W2 with no social security or medicare income shown and who has to pay their own social security, medicare and health insurance with no help from the 'employer' in view of the fact that the 'employer' is unaware of any self-employed health premiums paid and has therefore made no deduction from W2 income to account for them?

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[TaxGuyBill · Accepted solution]

A minister that receives a W-2 (which is most of them) is NOT self employed (at least not for income tax purposes), unless they are ALSO receiving income from outside of their W-2 payments.

I would need to look up the specific verbiage, but maybe a minister would be considered self employed for purposes of Social Security.  But even if that is the case, they are an EMPLOYEE for purposes of income tax.  So you can't take the self employed health insurance income tax deduction for them.

[RogerP]

A Minister has a “dual tax status” as an:

• Employee for federal income tax purposes
• Self‐employed for payroll tax purposes

Multiple sources conclude health insurance deductions follow the rules pertaining to a Minister's status as an employee......unless they also receive separate self-employee income on top of their employee income as alluded to by TaxGuyBill.