Entering individual self-employed health insurance premiums from S-Corporation K-1 in Lacerte

What's new for the Self-employed health insurance deduction for tax year 2023:

Starting in tax year 2023 the IRS has released Form 7206 to calculate the Self-employed health insurance deduction for the 1040. In tax years 2022 and prior, the IRS used the Self-employed health insurance deduction worksheet from the 1040 instruction booklet to calculate the allowable deduction on the 1040.

Follow these steps if health insurance premiums were reported on a W-2 starting in tax year 2023:

1. Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
2. Select Other Information from the left sections menu.
3. Select the box next to More than 2% shareholder in S corporation.
4. Enter the appropriate amount in the Medicare wages and tips field (code 7).
5. Go to Screen 20, Passthrough K-1's.
6. Select S Corporation Information in the Passthrough K-1's box from the left menu.
7. Select the appropriate schedule in the S Corporation box from the left menu.
8. Select Part II - Information About the Shareholder from the left sections menu.
9. Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
10. Enter all Schedule K-1 information.
    • Lacerte will include Medicare wages in net income for the self-employed health insurance deduction.

Follow these steps if health insurance premiums were not reported on W-2 in tax year 2023:

1. Go to Screen 24, Adjustments to Income.
2. From the Sections select SE Health Insurance (7206).
3. Enter the Premiums not entered elsewhere (excluding long-term care) (taxpayer code 16, spouse code 66).
4. Under the Long-term Care Premiums subsection, enter any applicable amounts in the corresponding fields.
   • Premiums paid for self-employed person (taxpayer code 26, spouse code 76)
   • Premiums paid by the taxpayer (code 34)
   • Premiums paid by the spouse for the taxpayer (code 84)
5. Under the Form and Activity Name or Number subsection in the Form (Ctrl+ T) field select Schedule K-1 (1120-S).
6. Select the applicable activity in Activity name or number.
7. Enter the appropriate net earnings in Net profit of business under which plan is established [A].
8. Go to Forms and view 7206.
9. The deductible amount will flow to Form 1040, Line 29.

To override the SE health insurance deduction:

1. Go to Screen 24, Adjustments to Income.
2. From the Sections select SE Health Insurance (7206).
3. To make adjustments to the deduction use the Net Earning Adjustments subsection.
   • The override for SE Health Insurance Deduction is no longer available. Use the adjustments to change the calculations on the 7206.