8962 allocation and S Corp health insurance deduction

[JBP]

I have a married couple with a 1095-A that includes their non-dependent 25 year old daughter who is filing her own return. Received APTC.
My understanding is they can split the allocation on 8962 any way they all agree to, which in this case is 100% to the daughter.

The taxpayer is an S Corp owner and the health insurance premiums she paid are treated as S Corp health insurance that was added to her wages (W2 box 1). Normally I'd give her the SEHI deduction for what was added to wages, but if we allocate the 8962 100% to the daughter is it still legitimate to take the SEHI deduction? The taxpayer paid the premiums (reduced by APTC).

I think it's okay, but it's such a huge swing with the tax liability that I want to double check that I'm not overlooking something. Thank you.

[Rapid Robert]

"S Corp owner and the health insurance premiums she paid are treated as S Corp health insurance that was added to her wages"

Were the premiums for taxpayer and/or spouse? APTC has nothing to do with it.

"The taxpayer paid the premiums (reduced by APTC)."

Insurance premiums are not "reduced" by APTC, rather they are either paid out of pocket or subsidized via APTC, the same premium is paid either way. Who is paying back the APTC, if applicable? It may be that what the taxpayer paid was reduced by APTC and then increased by APTC paid back, but the premiums were not reduced.

I don't see any clear way for the S-corp >2% shareholder to treat insurance paid for someone not a member of the tax family as SEHI.

Disclaimer: I only had one client with almost this exact same information, but it was like five years ago and I don't have time to go find it right now.