employees health insurance

[oceanlovin'ea]

Can an S corp reimburse an employee for their medical insurance premiums if the employee is the spouse of the shareholder/employee?

It was just a thought that came to me as I was preparing quarterly reports. I have been considering her health insurance as a draw but just wondered if it could be an expense.

Linda F

[DaveO]

Include it in her taxable income but not subject to FICA or FUTA, check your state rules for SUI. Then take the Self Employed Health Insurance deduction on the front of the 1040.

[Burke]

Wouldn't she have to be more than a 2% shareholder to do that? The payment of the premiums by the Corp or the reimbursement of the premiums to the shareholder has to be made in the current tax year. The more than 2% shareholder can deduct the prems attributable to a spouse or dependent if they are included in his/her W-2.

[veritas]

The employee is

Wouldn't she have to be more than a 2% shareholder to do that? The payment of the premiums by the Corp or the reimbursement of the premiums to the shareholder has to be made in the current tax year. The more than 2% shareholder can deduct the prems attributable to a spouse or dependent if they are included in his/her W-2.

a 2% or greater owner by marriage

[oceanlovin'ea]

Ok, so I would just include the whole amount paid to BCBS for health insurance on his W-2 box 1 and then deduct it as an adjustment to income....not just the part that is his.

I'm glad that I haven't filed the 941 yet. I'm ready to do it online tonight so I will make the corrrection before I file.

Thanks for the help.

Linda