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Screen Coverage - Health Care Coverage (1040)
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Health Coverage Exemptions and Individual Responsibility
Dependents’ modified AGI for Form 8962
In the statement, enter household income information. For Form 8962, this is the modified AGI of the taxpayer and each individual claimed on the return who is also required to file a tax return. Enter the
AGI
(Adjusted gross income from Form 1040, line 11), Nontaxable interest
(Tax-exempt interest from Form 1040, line 2a), Foreign earned income exclusion
(Form 2555, lines 45 and 50), and Nontaxable Social Security
(difference between total Social Security benefits from Form 1040, line 6a and taxable Social Security benefits from Form 1040, line 6b). To exclude a dependent's MAGI from the household income calculation, enter X
in the Do Not Include in Household Income
column.You can use the Family Transfer Utility to transfer dependent modified AGI information from a dependent's return. Otherwise, the MAGI information required to complete this statement is available in each dependent return on Worksheet 6, Dependent Modified Adjusted Gross Income Worksheet. If MAGI information was transferred via the Family Transfer Utility, the
Client ID
column will display the client ID of the dependents whose information was transferred. If the dependent did not have a requirement to file a tax return, the Do Not Include in Household Income
column will be marked.Other Health Coverage Information
Self-employed health insurance premiums
Enter the amount of nonspecified self-employed health insurance premiums paid for the self-employment income from either of the following sources.
- Other self-employment income/loss in theOther incomestatement in the Income screen
- Self-employment income/loss from contracts or straddles in the 6781 screen
Within the statement, specify the source of the self-employment income by completing the
Form
field. If the taxpayer obtained specified premiums via the Health Insurance Marketplace, see the notes section below. The self-employed health insurance deduction calculates automatically for Schedule 1 (Form 1040 or 1040-SR) or Form 1040NR return.note
- Enter self-employed health insurance premiums applicable to Schedule C, F, or K1 activities in the related C, F, or K1-3 screens. Enter S-Corporation shareholder health insurance premiums in the related W2 screen, unless it was obtained via the Health Insurance Marketplace. Do not enter the amounts in this field for these activities.
- If the taxpayer did not obtain the insurance plan for this activity via the Health Insurance Marketplace – that is, the premiums that the taxpayer paid for health insurance coverage for this business were paid for coverage in a plan that is not a qualified health plan (i.e. all premiums paid are considered nonspecified premiums) – the SE health insurance deduction calculates using the Self-Employed Health Insurance Deduction Worksheet, which is based on the worksheet in IRS Publication 535, Business Expenses. Any amount not allowed as a Page 1 deduction automatically transfers to Schedule A as a medical deduction.
- If the taxpayer obtained the insurance plan for this activity via the Health Insurance Marketplace, complete the 1095A screen in the Health Care folder for the premiums reported on Form1095-A, and enterXin theApply to SE Health Insfield for all applicable months.
- If the taxpayer has specified premiums and is claiming the premium tax credit, the PTC Worksheets W, X, Simplified Calculation, Y and Z are produced, if applicable, to determine the appropriate self-employed health insurance deduction including any deduction allowed for nonspecified premiums paid in addition to specified premiums. These worksheets are based on the worksheets found in IRS Publication 974, Premium Tax Credit. As indicated in the publication, using the Simplified Calculation Method to determine the deduction and credit amounts is optional. If the taxpayer is eligible for both a self-employed health insurance deduction and PTC for the same premiums, you may use any calculation method that satisfies each set of rules as long as the sum of the deduction claimed for the premiums and the calculated PTC, taking the deduction into account, is less than or equal to the premiums.
Self-employed long-term care premiums
Enter eligible long-term care insurance premiums paid for the taxpayer, spouse, and/or dependents. Deduction limits are based on the code entered in the statement, attributable to the self-employment income from one of the following sources:
- Other self-employment income/loss in the Other income statement in the Income screen
- Self-employment income/loss from contracts or straddles in the 6781 screen
Within the statement, specify the source of the self-employment income by completing the
Form
field. Codes are available within the statement to identify for whom the premium was paid. The age of the taxpayer or spouse is verified from the date of birth information in the 1040 screen. For premiums paid on behalf of dependents, choose code 3
, 4
, 5
, 6
, or 7
. Each entry is limited as required. See the following limitation table.Age | Limitation |
|---|---|
40 or under | $470 |
41-50 | $880 |
51-60 | $1,760 |
61-70 | $4,710 |
71 or older | $5,880 |
The deductible amount applied is based on the column in which you enter the amount. For example, if the taxpayer pays the premium, regardless of who it is for, enter the amount in the Taxpayer column. The Self-Employed Health Insurance Deduction Worksheet showing the calculation prints when applicable. The amount not allowed as a deduction for Schedule 1 (Form 1040 or 1040-SR), line 17 of the 1040 return automatically transfers to Schedule A as a medical deduction.
The codes that are available in the
State Use
field in the attached statement are specific to the state postal code entered in the State
field. If state use codes are not applicable to the entered state, state use codes will not be available.note
- If you enter long-term care premiums for the taxpayer or spouse for multiple activities, the total deduction is limited to the maximum allowed based on the age of the taxpayer and spouse at the end of the year. However, the deduction cannot be limited for dependents if the data is entered for multiple activities. Therefore, if you enter dependent data for multiple activities, you should not enter more than the allowable limit for each dependent based on their age. Review the limits shown above. This does not apply if data is entered for only one activity.
- If no date of birth exists for the taxpayer or spouse, the deduction does not calculate.
The W-2 screen unit# under IRC Sec. 318(a)(1) family attribution rules
When the W2 screen (box 14) has medical insurance premiums, this field lists W-2s for the respective individual (either the taxpayer or spouse) that includes medical insurance premiums entered in box 14 of the W-2. Each W-2 includes the employer name. If the taxpayer or spouse qualifies for the self-employed health insurance deduction via the shareholder family attribution rules in IRC Sec. 318(a)(1), choose the corresponding W-2 unit here. The medical insurance premiums entered in the W2 screen, box 14 as well as the box 5 Medicare wages, will be reported on line 1 and line 5, respectively, of the Self-Employed Health Insurance Deduction Worksheet.
note
- You must enter medical insurance premiums in box 14 in the W2 screen.
- If this field is grayed out, make sure box 14 of the W-2 in the Income input folder is completed correctly. It will stay grayed out if the Code 3 entry is assigned a form other than the default Schedule A.
- You may designate only one unit of the W2 screen per taxpayer as qualifying for the SE health insurance deduction under the family attribution rules.