How are S corp SE health insurance premiums to be reported for divorced taxpayer who must allocate health insurance premium percentage among taxpayer and former spouse?

[ekhosme]

SE health insurance premiums reported on 1095-A were linked to K-1 from S-Corporation.  Taxpayer divorced in 2018 and must allocate a portion of the advance premium tax credit to former spouse.  Entering allocations into shared policy fields on 1095-A caused an error, reporting you cannot enter allocations and link 1095-A to SE health insurance.  How do I report SE health insurance premiums for premiums paid by taxpayer and also allocate portion of premium tax credit to former spouse?

[Accountant-Man]

Why would marketplace premiums be reported on the k-1? I thought they were personal only premiums.

[ekhosme]

If you are a sole shareholder/employee of an s-corporation the premiums you pay can be deducted as self-employed health insurance on your 1040 if properly included on your W-2.  To deduct the self-employed health insurance from AGI on the 1040, the 1095-A must be "linked" to the K-1.

[ekhosme]

If I remove the link to K-1, error disappears and the SE health insurance deduction disappears.  If I leave the 1095-A linked to the K-1, the error remains and the SE health insurance deduction has exceeded the sum of health insurance payments made plus premium tax credit repayment by almost $1,000.  This is the message on LTC/Health insurance worksheet "A self-employed health insurance adjustment of $9300 from premiums paid through an exchange is included as an adjustment to income but does not appear on these worksheets."  Would be nice to follow the calculation.

[TaxGuyBill · Accepted solution]

I'm not 100% sure if this would give the correct result, but if it is being allocated evenly, these are the two options I can think of.  If the percentage are not even, I think you are in trouble and would need to manually calculate everything (which is gruesome).

Option #1:

1. Manually apply the percentage to the 1095-A, and temporarily enter that into the program.  For example, if it says $1000 and the allocation percentage is 50%, enter $500.  Link it to the K-1, but don't fill in the allocation section.
2. Print out the tax return and look at the SEHI amount on Line 29 of Schedule 1, the repayment on Line 46 of Schedule 2, the extra PTC on Line 70 of Schedule 5, and the 8962.
3. Enter the 1095-A as it is shown.  Enter the allocation.  Link the K-1.  Override all numbers on the tax return to match Step #2.
4. Disable error checking, and e-file.

Option #2:

1. Manually apply the percentage to the 1095-A, and permanently enter that into the program.  For example, if it says $1000 and the allocation percentage is 50%, enter $500.  Link it to the K-1, but don't fill in the allocation section.
2. Print out tax return (or create a PDF) and manually fill in the allocation section of the 8962.
3. Mail the tax return.
   

[ekhosme]

Thank you for your response.  I calculated using option 1, which resulted in $300 tax difference between using percentage allocation and calculating using half the APTC  on 1095-A, part III, column C.  The SEHI deduction is the only difference, and there are no supporting schedules to show the calculation.  Would be nice if Pro-Series could provide those supporting schedules.