Medical Reimbursement Plans - §105

[jmc]

Medical Reimbursement Plans - For exclusion purpose, a 2% or more S corporation shareholder is not considered an employee.
Then, if a spouse works for the S corporation, and S corporation pays her Medical Reimbursement Plan expenses, can the expenses covered under the plan for a 2% or more S corporation shareholder with that spouse be eligible for income exclusion? I could not find specific document regarding this situation. Thanks.

[Zee]

Spousal participation

In S-Corporation situation, the spouse of the shareholder is deemed to be a shareholder under Section 1372 via the attribution rules of Section 318. So, the spouse of a 2% will not qualify as a participant.