Discussion:Lacerte and the health care credit

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Discussion Forum Index --> Tax Questions --> Lacerte and the health care credit


JAD (talk|edits) said:

5 March 2013
Lacerte expanded its input for the calculation of the small employer health insurance premium credit. I was looking forward to using this feature, thinking that it would make the calculation easier.

The program is using the information in a way that is different from my understanding of the law. I understood that we exclude people who worked less than 120 days from the calculation of full-time equivalency and average wages. This is per 45R(d)(5).

Lacerte is clearly using the seasonal employee information in the calculation of the amounts on lines 2 and 3.

The easy solution would be to simply delete those people from the input grid in the software. However, premiums paid on their behalf are counted in determining the amount of the credit per form instructions, so that information is relevant.

Does anyone have experience using Lacerte to calculate this credit? Have I misunderstood any details of this calculation?

Ckenefick (talk|edits) said:

6 March 2013
How did info for the seasonal employees get into Lacerte to begin with?

JAD (talk|edits) said:

6 March 2013
Entered by me, expecting Lacerte to disregard it in the calc of the full-time equivalent hours and average wages and to use it in determining the total amount of health insurance expense.

Do you use Lacerte? It's a table with data entry for each employee.

Ckenefick (talk|edits) said:

6 March 2013
I use Lacerte for 1040's, and here's what Lacerte says when I hit F1:

Enter the following information for each person considered an employee for purposes of this credit:

Well, these people you describe, like the business owners, would not be considered "employees" for purposes of the credit...so they shouldn't even be entered.

JAD (talk|edits) said:

6 March 2013
Do you disagree that the amount paid for the seasonal employees' health insurance is included in the credit calculation? The program is going through a calculation to apply the % paid and compare to the small group market. If the information is not entered, then the total paid for health insurance will be understated, and the credit will be understated.

Ckenefick (talk|edits) said:

6 March 2013
Do you disagree that the amount paid for the seasonal employees' health insurance is included in the credit calculation?

I agree that hlth ins paid for these folks is elgible for the credit.

From Notice 2010-44:

Seasonal workers are disregarded in determining FTEs and average annual wages unless the seasonal worker works for the employer on more than 120 days during the taxable year, although premiums paid on their behalf may be counted in determining the amount of the section 45R credit.

It appears that the problem is the manner in which Lacerte requires the inputs and runs the calculation. As such, I'm simply thinking you don't enter these folks into Lacerte. This should make your calculations for Lines 2 and 3 accurate. Then, you can account for the health insurance paid for these folks elsewhere. Or, you could do the reverse: Enter the employees and then over-ride Lines 2 and 3.

I have a master spreadsheet that I formulated and I only use Form 8941 as a double-check. These rules are a bit complicated and the people that wrote the rules don't return phone calls. Feel free to e-mail me and I'll send it to you.

JAD (talk|edits) said:

6 March 2013
Thanks Chris. I have a schedule also, but I always like to double check with someone before assuming that Lacerte's treatment is wrong or limited.

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