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Self-employed health insurance deduction isn't calculating

Shareholder-employee medical insurance premiums (including any long-term care amounts) entered in the W2 screen, box 14, must also have the
Form/Sch
 and
Unit
 columns completed in order for the program to accurately calculate the Self-Employed Health Insurance Deduction Worksheet.
If the
Form/Sch
 and
Unit
 fields are completed, and the deduction is still not calculating, review the
W2
 screen box 5 (Medicare wages). In order for the SE health insurance deduction to calculate, box 5 wages must be present on the
W2
 screen. S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder employee.
If the only thing reported on the W2 is the equivalent insurance premium amount in box 1 (i.e. a non-wage distribution), that alone is not considered reasonable compensation. If the wages are reported on a Form W-2 from the S corporation separate from the insurance premiums (i.e. the shareholder employee does have reasonable compensation), the data entry for box 14 has to be done on the unit with the wage compensation.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
  • Tax jurisdiction: Federal
  • Subject: Health care

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