>2% Shareholder, qualify for Subsidy

[DaveinTexas]

My thought is

I think we need to wait for some final regulations regarding this issue but I would think that the >2% sub S shareholder would have the premiums for insurance included in the W2, and then for calculating subsidy it would follow the same rules as everyone else based on modified AGI.

since the Premiums are taxable income (reported as Box 1 Wages), the employer really isn't "reimbursing" the premiums. I just wish there was a FAQ about this topic somewhere. Frustrating!

[ATSMAN]

I think we need to wait for some final regulations regarding this issue but I would think that the >2% sub S shareholder would have the premiums for insurance included in the W2, and then for calculating subsidy it would follow the same rules as everyone else based on modified AGI.

[DaveinTexas]

I'm stumped. A client posed a question regarding paying health care premiums through their S Corp (more than 2% shareholder) and whether or not they could still qualify for the new subsidy and I can find no definitive answer; hep me buddies!

Client Question: We now have Obamacare health insurance. Does that change make me in eligible to reimburse myself on my paycheck through the S-corp as has been done in the past? And, yes we did qualify for a subsidy if that matters.

The client followed up the question with a clarifying question:

Follow up question: We are eligible for the subsidy specifically because our new plan is “not reimbursed by an employer”. Technically, our corporation is our employer so the concern is that we will lose the subsidy if the premium is reimbursed through our company.

I look to Notice 2008-1 for the answer and then to the Healthcare.gov website for clarity. That website is the biggest piece of garbage, nice looking but no real content (much like IRS.gov).

Anyone have any guidance I can rely on to help my client?

Thanks in advance!