SEHI and PTC

[peggysioux]

Taxpayer had health ins. premium of $13,918 with an advanced PTC of $6528. Drake is computing a repayment of $668 and line 29 of the 1040 as $6995. I compute the SEHI on line 29 as $8058 rather then the $6995 based on $13,918 less $6528 + the repay of $668 leaves a balance of the premium at $8,058. Is there a way to override Drake's calculations or can someone point out why my calculations might be incorrect?

Much appreciated.

Peggy Sioux

[Lion]

Is it limited by his profits less SE adjustment? If so, the excess would go to Sch A.

[kathyc2]

Is the 13,918 possibly the cost of SLCSP rather than the plan chosen?

[Kram BergGold]

My Guess as to What is Wrong

You aren't supossed to enter the insurance on Schedule C. Just put it on the 1095-A and link it to Schedule C. Then let the software do the rest.

[New York Enrolled Agent]

Taxpayer had health ins. premium of $13,918 with an advanced PTC of $6528. Drake is computing a repayment of $668 and line 29 of the 1040 as $6995. I compute the SEHI on line 29 as $8058 rather then the $6995 based on $13,918 less $6528 + the repay of $668 leaves a balance of the premium at $8,058. Is there a way to override Drake's calculations or can someone point out why my calculations might be incorrect?

Oh, if it was only that easy.

You need to review Rev Proc 2014-41 for the correct procedure. I can't speak to the Drake calculation but there is a circular relationship between the SEHI and the PTC and that may lower the SEHI below what you calculated. Thus, the Drake calculation may well be correct.

[peggysioux]

Sehi & ptc

Is the 13,918 possibly the cost of SLCSP rather than the plan chosen?

The $13,918 is the cost of the plan, the SLCSP was $10,331. Taxpayer's net profit was over $51,000 so deduction is not limited at all by net profit. I can't figure out how Drake is determining the numbers.....

[kathyc2]

With what you have posted, I would agree w/ your expectation of 8,058 for SEHI. I don't use Drake, but would check if it is throwing the difference to Schedule A. If it is, you may have missed a link, check option etc in the software to keep it all from going to SEHI.

[JudyL]

Peggysioux, I answered your same post over on the Drake forum with how I entered the data into a dummy form and the amounts calc'd by Drake's program. Maybe review that and see if it helps to clarify the input and amounts. It appears to be working correctly for me.

[peggysioux]

Sehi & ptc

Taxpayer is HOH with one dependent and contributing $6500 to a traditional IRA. The only health insurance entry I made was on the Schedule C and also input info for the 1095-A.

[JudyL]

Taxpayer is HOH with one dependent and contributing $6500 to a traditional IRA. The only health insurance entry I made was on the Schedule C and also input info for the 1095-A.

OK, I'll update the post over on Drake's forum. It still looks like it's working to me.

Here's what I did:

Filing as HOH, TP is over 50 yrs of age, one dependent, IRA deduction of 6500
Sch C screen had gross receipts of $51000 and the gross premiums paid of $13918,
SEHI screen had NO input
HC screen, checked the "yes" box for full year coverage
1095-A screen I completed parts I and II, and filled in annual totals of premium $13918, SLCSP $10331, APTC $6528
I did NOT complete the 8962 screen input.


Anyway, it still appears that Drake's software is working the way it should. I updated my dummy return and got the following results:
Sch C of 51000
1/2 SE tax deduction of 3603
SEHI deduction of 6072
IRA deduction of 6500
AGI of 34825
Addl PTC on line 69 of 1303

Form 8962 shows FPL pf 15510, 225% on line 5, taxpayer's annual contrb toward premiums on line 8a of 2500
It's allowing a PTC of 7831 on line 24 of the 8962, so the additional the TP is entitled to is the 1303 (7831 - APTC of 6528 )

SEHI proof: total prems of 13918 - the final PTC allowed of 7831 = 6087 (a small $15 difference to that shown on 1040 line 29)

[New York Enrolled Agent]

With what you have posted, I would agree w/ your expectation of 8,058 for SEHI. I don't use Drake, but would check if it is throwing the difference to Schedule A. If it is, you may have missed a link, check option etc in the software to keep it all from going to SEHI.

I don't suppose you took the time to read Rev Proc 2014-41 - sometimes the facts get in the way of the opinions.