This article will assist you with entering self-employed health insurance premiums from an S corporation Schedule K-1 in the Individual return in Intuit ProConnect.
What's new for the Self-employed health insurance deduction for tax year 2023:
Starting in tax year 2023 the IRS has released Form 7206 to calculate the Self-employed health insurance deduction for the 1040. In tax years 2022 and prior, the IRS used the Self-employed health insurance deduction worksheet from the 1040 instruction booklet to calculate the allowable deduction on the 1040.
Follow these steps if self-employed health insurance premiums were reported on a W-2:
- Go to Input Return ⮕ Income ⮕ Wages, Salaries, Tips (W-2).
- Enter all W-2 information on this screen.
- From the top of the screen, select Less Common Scenarios.
- Under the Other Information section, locate the Miscellaneous Information subsection.
- Check the box labeled More than 2% shareholder in S corporation.
- From the left of the screen, select Income and choose Passthrough K-1's.
- Select S-Corp Info (1120S K-1).
- Scroll down to the Part II - Information About the Shareholder section.
- Select the appropriate W-2 in the Name or number of W-2 received by greater than 2% owner field.
- Enter all other Schedule K-1 information.
- From the top of the screen, select Lines 11-17.
- Scroll down to the Line 17 - Other Information section.
- Enter the applicable amount in the Self-employed health insurance premiums field.
The program will include Medicare wages from Form W-2, box 5 in the net income from self-employment calculation. Any excess premiums that don't qualify for a deduction on Form 1040, Schedule 1, line 16 will flow to the Schedule A as an itemized deduction.
Follow these steps if health insurance premiums were not reported on W-2 starting in tax year 2023:
- Go to Input Return ⮕ Deductions ⮕ Adjustments to Income.
- From the top of the screen, select Health Insurance.
- In the SE Health Insurance (7206) section enter the appropriate amount in Premiums not entered elsewhere (excluding long-term care).
- Under the Long-term Care Premiums subsection, enter any applicable fields.
- Scroll down to the Form and Activity Name or Number section.
- Select 4 = Schedule K-1 (1120-S) in the Form (Click on arrow to select from list) dropdown menu.
- Select the applicable activity in Activity name or number.
- Enter the Net profit of business under which plan is established [Adjust] field.
- Go to the Check Return tab to view the Form 7206.
- The deductible amount will flow to Form 1040.
Follow these steps if health insurance premiums were not reported on W-2 in tax year 2022 and prior:
To adjust the SE health insurance deduction starting in tax year 2023:
- Go to Input Return ⮕ Deductions ⮕ Adjustments to Income.
- From the top of the screen, select Health Insurance.
- In the SE Health Insurance (7206) section scroll down to Net Earnings Adjustments.
- Use the Net profit of business under which plan is established [Adjust] and Net profit of all business [Adjust] fields to adjust the calculations on the 7206.
