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Entering individual self-employed health insurance premiums from S-Corporation K-1 in Lacerte

SOLVEDby IntuitLacerte Tax122Updated July 14, 2022

Earned income is required to be able to take the self-employed health insurance deduction.


Per the worksheet instructions for Form 1040, Schedule 1, Line 16: "If you were a more-than-2% shareholder in the S corporation under which the insurance plan is established, earned income is your Medicare wages (box 5 of Form W-2) from that corporation."

Publication 15b, page 13 states:

  • You cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provided the 2% shareholder in his or here wages.  When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages.  Include the cost in boxes 1, 3, and 5 of Form W-2.  However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder.

Follow these steps if health insurance premiums were reported on a W-2:

  1. Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
  2. Select Other Information from the left sections menu.
  3. Select the box next to More than 2% shareholder in S corporation.
  4. Enter the appropriate amount in the Medicare wages and tips field (code 7).
  5. Go to Screen 20, Passthrough K-1's.
  6. Select S Corporation Information in the Passthrough K-1's box from the left menu.
  7. Select the appropriate schedule in the S Corporation box from the left menu.
  8. Select Part II - Information About the Shareholder from the left sections menu.
  9. Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
  10. Enter all Schedule K-1 information.
    • Lacerte will include Medicare wages in net income for the self-employed health insurance deduction.

Follow these steps if health insurance premiums were not reported on W-2:

  1. Go to Screen 24, Adjustments to Income.
  2. Select SE Health Insurance in the left sections menu.
  3. Enter the appropriate amount in the field Premiums not entered elsewhere (excluding long-term care).
  4. Enter the appropriate information for Long-term Care Premiums if applicable.
  5. Under Net Earnings, select Schedule K-1 (1120-S) in the Form (Ctrl+T) field.
  6. Select the applicable activity in Activity name or number.
  7. Enter the appropriate net earnings in Net earnings [A].
  8. Go to Forms and view the Worksheets.
  9. Lacerte will generate a worksheet to calculate the Self-Employed Health Insurance Deduction.
  10. The deductible amount will flow to Form 1040, Line 29.

To override the SE health insurance deduction:

  • Go to Screen 24, Adjustments to Income.
  • Select SE Health Insurance in the left sections list.
  • Select into the field SE health insurance deduction [O] to expand the entry box.

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