Health Insurance Premiums Paid for S-Corporation Shareholders
Health Insurance Premiums Paid for S-Corporation Shareholders
Download: Health Insurance Premiums Paid for S-Corporation Shareholders.
To comply with the Internal Revenue Service regulations regarding health insurance provided to an employee who owns a 2% or greater interest in an S-Corporation (a “2% shareholder-employee”), the health insurance premiums for the 2% shareholder-employee must be reported on the shareholder’s Form W-2. In addition, the health insurance policy should be issued under the Corporation’s name.
Under these regulations, the S-Corporation will be entitled to deduct the insurance premiums, and the 2% shareholder-employee will be entitled to deduct, as an adjustment to gross income, the amount reported on the W-2. The amount of the health insurance premiums included in the 2% shareholder-employee’s W-2 will be subject to income tax, but will not be subject to Social Security, Medicare or Federal and State Unemployment taxes.
If we prepare your payroll, please provide us with the health insurance premiums paid on behalf of 2% shareholder-employees. We will include this amount in the Corporation’s 4th quarter and annual payroll reports on the W-2s.
If we do not prepare your payroll, please provide your payroll service with the amount of health insurance you have paid in 2024 on behalf of a 2% shareholder-employee (and their dependents).
If you have any questions, please contact our office at (858) 483-7500 or you can email us at inbox@reasontax.com.