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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

Why is there no self-employed health insurance deduction calculating for shareholder-employee medical insurance premiums entered in the W2 screen, box 14?

Answer

Shareholder-employee medical insurance premiums (including any long-term care amounts) entered in the W2 screen, box 14, must also have the Form/Sch and Unit columns completed in order for the program to accurately calculate the Self-Employed Health Insurance Deduction Worksheet. If the Form/Sch and Unit fields are completed, and the deduction is still not calculating, review the W2 screen box 5 (Medicare wages). In order for the SE health insurance deduction to calculate, box 5 wages must be present on the W2 screen. S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder employee. Therefore, if the only thing reported on the W2 is the equivalent insurance premium amount in box 1 (i.e. a non-wage distribution), that alone is not considered reasonable compensation. If the wages are reported on a Form W-2 from the S corporation separate from the insurance premiums (i.e. the shareholder employee does have reasonable compensation), the data entry for box 14 has to be done on the unit with the wage compensation.

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