I have a client that has two former employees now as 2% shareholders of the S-corp.
The S-corp is reimbursing the employees for the total cost of the COBRA payments.
According to Publication 15-B (2010), the COBRA payments are considered accident and heal benefit payments.
According to the same Publication 15-B, these reimbursements must be included in the employee (2% shareholder) wages subject to federal income tax withholding.
Is my logic correct and complete for this conclusion?
Thank you.
The S-corp is reimbursing the employees for the total cost of the COBRA payments.
According to Publication 15-B (2010), the COBRA payments are considered accident and heal benefit payments.
According to the same Publication 15-B, these reimbursements must be included in the employee (2% shareholder) wages subject to federal income tax withholding.
Is my logic correct and complete for this conclusion?
Thank you.