S corp health insurance on W2 & 941

[dhawkcpa]

S corp shareholder (100%) has health insurance for himself paid by corporation. I think it must be included in box 1 on the W2 but not for FICA. Then it is an adjustment on the 1040. Should it also go on the 941 so that the W3 and the 941s will reconcile? Thanks.

[RitaB]

Right you are

S corp shareholder (100%) has health insurance for himself paid by corporation. I think it must be included in box 1 on the W2 but not for FICA. Then it is an adjustment on the 1040. Should it also go on the 941 so that the W3 and the 941s will reconcile? Thanks.

Yes, that is correct.

[John of PA]

I agree with everything except that the higher wages (which includes the health insurance) would not go on the 941 becasue those wages are not subject to FICA and HI.

[Y2KEA]

The total wages including HI go in box 2 of the 941.
The non FICA/MCDR wages go in box 5A & C.
This way everything will tie to the W3.

[appelman]

Box 14

You also may want to put in a Box 14 entry on the W-2 something like "Owner Med Insur." No need to change withholding, since it will wash out on the 1040. I agree that Box 2 of the 941 needs to reflect W2 wages. If you're amending, I'd lump it all in the 4th quarter.

[dhawkcpa]

Let me sum this up:
1 SCorp deducts owner's medical insurance cost as employee medical
2 SCorp adds it to wages on 941 but not to SS or Medicare
3 SCorp adds it to wages on W2 but not to SS or Medicare so that 941s and W3 will reconcile
4 SCorp subtracts it on 940 line 4 as an exempt payment
5 Shareholder subtracts it on 1040 page 1 as self employed insurance if SCorp income allows

Sound right?

[Burke]

Yes you have it correctly.