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Why is Pro Series not allowing an S Corp shareholder health insurance correctly on W-2 to flow to 1040 line 29 when shareholder also receives a form 1095-A (with no premium tax Credit?
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This is governed by Revenue procedure 2014-41, and leads to an unfavorable taxpayer conclusion, where essentially the PTC which they do not end up being allowed to claim reduces their SEHI adjustment.
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@PhoebeRoberts ??? SEHI will be limited to Box 5, minus Line 28 on Form 1040.
@jbb What is Box 5 of the W-2? Any retirement contributions on Line 28 of Form 1040? Double check no Premium Tax Credit - check Line 24 of Form 8962.
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This is the point where I start doing the math by hand and stop the software from trying to calculate this for me. Spend some time with the Rev Proc that TaxMonkey mentions below.
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The proper calculation goes back-and-forth until it gets an answer (or it gives up). When the calculation goes past 400% of the Federal Poverty Level, ProSeries stops the calculation and denies the credit, even though calculation should keep going back and forth until there is an answer..
As was mentioned, manually calculating it (which can be gruesome) would give a true answer, but contributing to a deductible IRA or HSA would probably solve the problem as well.
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This is governed by Revenue procedure 2014-41, and leads to an unfavorable taxpayer conclusion, where essentially the PTC which they do not end up being allowed to claim reduces their SEHI adjustment.
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My second guess (much less likely since it's not hiding on some obscure worksheet somewhere like the medicare wages box) is that your 1095-A is not linked to the S Corp. At the bottom of the 1095-A there's a "Business Related Premiums Information Smart Worksheet" where you can double click in the "box" next to "Schedule K-1, S-Corp" and link this form to the S Corp. You also have to fill in the start/end months at the very bottom.
Rick
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My first guess (as others have alluded to) is that you're running into an income limitation for SEHI. Here's the first place I'd look:
On your Sch K-1 Wks for this S Corp, right above "Part III" there is a QuickZoom to enter health insurance paid. That will take you to the K1S Addl Info 1 worksheet and put you at the bottom of the form in a section for "Outside Expenses". The interplay with the 1095-A is going to be weird so I'd leave box 1 blank "Health insurance premiums paid . . . that were not reported on 1095-A" but the important entry will be box 2, "Medicare wages from this corporation". Put the number from box 5 of the W-2 here.
Rick
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