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Entering self-employed health insurance premiums from S corporation Schedule K-1 in ProConnect Tax

by ProConnect Tax Online Updated 3 months ago

This article will assist you with entering self-employed health insurance premiums from an S corporation Schedule K-1 in the Individual return in Intuit ProConnect.

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 self-employed health insurance premiums were reported on a W-2:

  1. Go to Input Return Income Wages, Salaries, Tips (W-2).
  2. Enter all W-2 information on this screen.
  3. From the top of the screen, select Less Common Scenarios.
  4. Under the Other Information section, locate the Miscellaneous Information subsection.
  5. Check the box labeled More than 2% shareholder in S corporation.
  6. From the left of the screen, select Income and choose Passthrough K-1's.
  7. Select S-Corp Info (1120S K-1).
  8. Scroll down to the  Part II - Information About the Shareholder section.
  9. Select the appropriate W-2 in the Name or number of W-2 received by greater than 2% owner field.
  10. Enter all other Schedule K-1 information.
  11. From the top of the screen, select Lines 11-17.
  12. Scroll down to the Line 17 - Other Information section.
  13. Enter the applicable amount in the Self-employed health insurance premiums field.

The program will include Medicare wages from Form W-2, box 5 in the net income from self-employment calculation. Any excess premiums that don't qualify for a deduction on Form 1040, Schedule 1, line 16 will flow to the Schedule A as an itemized deduction.

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

  1. Go to Input Return Deductions Adjustments to Income.
  2. From the top of the screen, select Health Insurance.
  3. In the SE Health Insurance (7206) section enter the appropriate amount in Premiums not entered elsewhere (excluding long-term care).
  4. Under the Long-term Care Premiums subsection, enter any applicable fields.
  5. Scroll down to the Form and Activity Name or Number section.
  6. Select 4 = Schedule K-1 (1120-S) in the Form (Click on arrow to select from list) dropdown menu.
  7. Select the applicable activity in Activity name or number.
  8. Enter the Net profit of business under which plan is established [Adjust] field.
  9. Go to the Check Return tab to view the Form 7206.
    • The deductible amount will flow to Form 1040.
  1. Go to the Input Return tab.
  2. From the left of the screen, select Deductions and choose Adjustments to Income.
  3. From the top of the screen, select Health Insurance.
  4. Enter the appropriate amount in Premiums not entered elsewhere (excluding long-term care).
  5. Under the Long-term Care Premiums subsection, enter any applicable fields.
  6. Scroll down to the Net Earnings (if multiple businesses) section.
  7. Select 4 = Schedule K-1 (1120-S) in the Form (Click on arrow to select from list) dropdown menu.
  8. Select the applicable activity in Activity name or number.
  9. Enter the Net earnings [Adjust].
  10. Go to the Check Return tab to view the Worksheets.
    • The program will generate a worksheet to calculate the Self-Employed Health Insurance Deduction.
    • The deductible amount will flow to Form 1040, line 29.

To adjust the SE health insurance deduction starting in tax year 2023:

  1. Go to Input Return Deductions Adjustments to Income.
  2. From the top of the screen, select Health Insurance.
  3. In the SE Health Insurance (7206) section scroll down to Net Earnings Adjustments.
  4. Use the Net profit of business under which plan is established [Adjust] and Net profit of all business [Adjust] fields to adjust the calculations on the 7206.
  1. Go to the Input Return tab.
  2. From the left of the screen, select Deductions and choose Adjustments to Income.
  3. From the top of the screen, select Health Insurance.
  4. Enter the SE health insurance deduction [Override].

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