self employed health insurance dedcution with insurance purchased on exhange

[Liesal]

Client is self employed and for all of 2024 purchased health insurance through the exchange.    ON the

1095 a input sheet i have linked the exchange policy to the schedule c. Taxpayer gets no subidty and pays the enitre premium monthly based on 2023 income which was 600 plus.

   when calculating the self employed health deduction pro series at bottom of page with an asterisk indicates tp receives an additional deduction of xxx$.   Now with an agi of 212k is he somehow eligible for a subsidy and that is what this number is reflecting? there is no other cross reference to the other deduction line of how the insurance total  number was obtained. 

 an extra deduction of 9200$ i need to prove why tp is getting this. and not a glitch or somehow i missed a check box somewhere

[IRonMaN]

Interesting question.  This weekend I was working on a client with a schedule C with similar income that is also tripping a credit.  I am on hold for the return waiting for additional client information so I have looked closely to see why it is happening.

[Liesal]

it does appear to be a refund ..check out form 8962.

hard to imagine with income of 200k plus that the government will subsidize but i guess so.  

[IRonMaN]

I wouldn't be quite so quick to assume that the software is correct.

[Accountant-Man]

How big is the Household?

[Liesal]

two

[Liesal]

any one find anythng as to how this number is calacluted.   Client is now questioning this?

[TaxGuyBill]

First, the credit.

When you look at the top of Form 8962 (lines 1-8), do the numbers seem accurate?

If so, look at line 8 and compare it to the SLCSP.  If line 8 is lower than the SLCSP, they usually qualify for a credit, which shows up on line 24.

At first glance, does all of that seem accurate?

[IRonMaN]

I reviewed mine and everything appeared to flow properly.

[Liesal · Accepted solution]

after a  phone call to intuit, i actually solved the issue while on the phone .   SO premiums paid thru an exchange will be comprised of the actual expense calculated on form 8962 and then the premium tax credit if any or basically the overpaymnet of premiums paid which is refundable.    form 8962 calculates the credit.  so if you take actual dollar paid less premium tax credit you get actual cost of insurance paid thru exchange which in schedule c becomes a a page 1 deduction.  My error was including the se payments paid as a line 1  amount on form 7206.  at the bottom of form 7206 is a typewritten note saying an amount of xx will be included on page 1 as an deduction to agi.   so  for sch c persons paying through the exchange.   complete 1095 and link to schedule c but DO NOT put premiums paid on 7206.  the software magically carries the recomputed actual expense deduction to schedule 1 as an other deduction.  ..It would be nice for software to have said  not to reenter premiums piad on f 7206 line 1 or otherwise noted that the actual xpense gets carried to schedule 1 other deductions and i relayed that to agent.

Nothing would have told me not to reenter prmiums paid on f 7206 except perhaps common sense which apparently  i did not have at the initial prep time.   so 

again   sch c premiums paid thru exchange..complete 1095 and link to schedule.c   You need to do nothing else.