Subchapter S shareholder health insurance premiums

[JON]

Sub S and distributions

If you have more than one shareholder in an S Corp you have to be careful to always have distributions in the same % as stock ownership. Outside of that in my too many years of preparing S corps, especially single stockholder Corps, I have never under audit had anything charged as a distribution questioned at all. In one case credit card transactions were recorded as some business and the personal charges were called distributions. I would need to know something very specific that would say these rules have changed. I have had loans for personal cars paid out of the S Corp and charged as a distribution. The only issue that started being raised with regular monthly items classified as distributions was the premise for more should be salary especially if a personal service business. I do not think there is any authority that says distributions of current distributable net income or past needs to have any type of organization authority to do it. So why would health insurance payments charged to distibutions be any different??? If you have Previusly Taxed Income you can only distribute that by election and corporate authorization. Have i just been lucky all these years?????

[AccTaxMan]

B. In November, the Department of Labor stated that any reimbursement of health insurance premiums by any employer (including Sub S Corps) that has more than 1 employee subjects that employer to a $100 per day penalty...

I am still confused with the "1 employee" or "more than 1 employee" definition.

Suppose an Scorp has 1 sole owner employee and one seasonal employee who only works 25 hours a week and 3 months a year. Does this Scorp has "1 employee" or "more than 1 employee"? In other words, is the seasonal employee considered an employee as far as the ACA is concerned?

[ATSMAN]

ACA defines full-time employees as those who work an average of 30 hours per week.

For the test to determine the number of full-time employees, employers will be allowed to exclude those full-time seasonal employees who work less than 120 days during the year.

Obviously this may change in 2015 if the 40 hr. week requirement is passed??

[AccTaxMan]

ACA defines full-time employees as those who work an average of 30 hours per week.

For the test to determine the number of full-time employees, employers will be allowed to exclude those full-time seasonal employees who work less than 120 days during the year.

Obviously this may change in 2015 if the 40 hr. week requirement is passed??

Where can I find the details of the test that you have mentioned?

[ATSMAN]

Where can I find the details of the test that you have mentioned?

http://www.irs.gov/pub/irs-drop/n-12-58.pdf

[equinecpa]

Husband and part-time wife...

Client is an LLC filing as S corp, both husband and wife are 50/50 shareholders. Husband works full time, wife part-time for the business, they are the sole employees.

Will they still go afoul of ACA if they are reimbursed for their personal health insurance premiums? They have two individual plans paid personally. Could the husband be reimbursed for both premiums?

I'm so confused

Carolyn