Should APTC be included in the "total payments" you made for self-employed health insurance?

nil000
nil000 Member Posts: 2 Newcomer
in Filing my taxes

In the section:
Income > Business Income (Schedule C) > Edit > Health Insurance

There is line that says:
- Enter the total payments you made during 2023 for self-employed health insurance premiums for ***, ***, and your dependents:

My question is, is that total supposed to include what was paid via APTC (Advanced Premium Tax Credits)?

For example (fictional numbers),
If the total 2023 health insurance premiums were $10,000. $6,000 paid via APTC. $4,000 paid directly by me. Is it expecting I answer $10,000 or $4,000?

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  • Henry
    Henry FreeTaxUSA Agent Posts: 88
    Answer ✓

    Hi nil000, if you are self-employed and can take the Self-Employed Health Insurance Deduction (or an itemized deduction for your self-employed insurance premiums) and also qualify for the Premium Tax Credit on those same insurance premiums, you'll need to allocate your insurance premiums between the deduction and credit since the IRS doesn't let you count it for both.

    One method of figuring out how to not double count the premiums is described below. This method is optional, and the IRS allows other ways of allocating as long as they meet the qualifications for the deduction or credit. Other methods are described in IRS Publication 974.

    1. Complete your return and enter your premiums both on the Business Income screens as well as the Premium Tax Credit screens.
    2. Select SUMMARY from the menu bar, view your federal tax return, and find the amount on Form 8962, Line 24.
    3. Subtract the amount in Step 2 from the amount of premiums that you entered on both the Business Income screens as well as the Premium Tax Credit screens.
    4. Your Self-Employed Health Insurance Deduction is the smaller of:
      • The amount calculated in Step 3,
      • Form 8962, Line 11A (or the totals of Form 8962, Line 12A through Form 8962, Line 23A) minus Form 8962, Line 25 plus Form 8962, Line 29, or
      • The self-employed earned income from the business you entered your insurance premiums on.
    5. Enter the amount from Step 4 on the Business Income screens for the amount of health insurance premiums paid. You don't need to adjust your premiums entered on the Premium Tax Credit screens.
    6. If your deduction in Step 4 was only limited by your self-employed earned income, then you can enter the remaining insurance premiums as an itemized deduction.

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Answers

  • nil000
    nil000 Member Posts: 2 Newcomer

    @Henry Thanks for the detailed steps, but I'm still confused a bit by what you're saying.

    For your Steps 3, you're saying to subtract the amount from Step 2 from "premiums that you entered on both the Business Income screens as well as the Premium Tax Credit screens.". Wouldn't those amounts (the premium) be identical? The premium is $10,000 regardless of the screen. So the math would be using the same numbers in both cases and have identical results.

    And then in Step 4, your first bullet says the "amount calculated in Step 3", but you had said to make two calculations (though both are identical as stated previously, unless I'm not understanding correctly).

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  • Henry
    Henry FreeTaxUSA Agent Posts: 88
    https://community.freetaxusa.com/discussion/comment/1826#Comment_1826

    I am sorry for any confusion! Step 3 says to subtract the amount in Step 2 from the amount of premiums that you entered on both the Business Income screens as well as the Premium Tax Credit screens. This should be a single calculation. The amount that you entered on both of those screens is one number (even though it was entered in two places). Take that number and subtract the Step 2 amount from it.

    This should give you one result, which you can then use to complete Step 4.


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