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13537: Schedule C or F, Self-employed Health Insurance, and Screen 95A


1040 Individual Data Entry

A taxpayer with a Schedule C or Schedule F business received Form 1095-A from a health insurance Marketplace, which I entered on screen 95A. The taxpayer also purchased some additional health insurance elsewhere. All the insurance cost qualifies as a self-employed health insurance deduction.

Where do I enter the premiums for the SEHI deduction?



 

You have completed screen 95A and screen C or F (except for family health coverage) and Form 8962 is produced in View. To enter data for the self-employed health insurance (SEHI) deduction, you can:

  • Let the software figure the SEHI deduction. Use the Family health coverage field on screen C or the Family health coverage payments field on screen F.
    • Enter on screen C or F the total annual premium paid by both the taxpayer and the Marketplace, not just the taxpayer's share of the premium. This is the Annual Totals amount from line 33, column A of the taxpayer's 1095-A, or the sum of the premiums shown in column A. (If you are using SEHI screen overrides, this is the amount that should be entered on line 1.) The software nets out the total annual premium tax credit and determines the tentative deduction that flows to line 1 of the SEHID worksheet.

    Calculation of the SEHI deduction from Form 8962 is a circular iterative process. The SEHI deduction reduces the MAGI (see worksheet WK_89621) and may affect the annual premium tax credit (see the Instructions for Form 8962). If the credit changes, it affects the SEHI deduction and the MAGI, and so on. See Rev. Proc. 2014-41. This iterative calculation is handled by the software and produces a note, "SEHI AND PREMIUM TAX CREDIT RECONCILIATION", on the ACANOTES page in View to advise you of it.

    • Add to that entry the cost of any additional health insurance policy that isn't reported on screen 95A.
    • If
      • Only part of the household insurance entered on screen 95A qualifies for the SEHI deduction, figure the deduction yourself and enter it on screen 4, line 29.

      A note, "INSURANCE COSTS MISMATCH", is produced on the ACANOTES page in View if you enter an SEHI amount on screen CF or SEHI that is less than the total premiums on Form 8962.

      • None of the household insurance entered on screen 95A qualifies for the SEHI deduction, select the screen 95A option The Marketplace premiums on Form 8962 do not qualify as self-employed health insurance (bottom of the screen), which prevents the iterative calculation and produces a note, "ITERATIVE CALCULATION NOT DONE", on the ACANOTES page in View advising you of it. Enter SEHI premiums on screen C or F that are not reported on screen 95A.
  • Figure the SEHI deduction yourself and enter it on screen 4, line 29 (Self-employed health insurance deduction). Determine what should be reported on Form 8962 and use the override fields on screen 8962 to achieve the desired result. See Rev. Proc. 2014-41.

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