shareholder s corp revisited HE ins

[TAX4US]

Shareholder is a 50% owner and retired. S corp pays health insurance and puts on W-2 as wages. No SS or MT wages or withholding. Is tp entitled to tha 1040 pg 1 deduction? Brain dead this AM.

[DaveO]

No, the SEHI deduction is limited to the amount in Box 3 of the W-2.

[Burke]

Shareholder is a 50% owner and retired. S corp pays health insurance and puts on W-2 as wages. No SS or MT wages or withholding. Is tp entitled to tha 1040 pg 1 deduction? Brain dead this AM.

See Rev Ruling 91-26 and Chief Counsel Memorandum 201228037. Health insurance premiums cannot be deducted as SEHI to the extent they exceed the earned income (Box 3) of the employee/shareholder. Perhaps he can deduct on Sche A.