I have husband and wife both over 65, that ownes 100% of S-Corp. They have 2 salaried employees. S corp pays for h and w supplemental health care. Is included in their w-2 box 1 but not the other boxes. Dilemma is this: Employee 1, married cannot be covered on husbands insurance due to costs and can't get Obamma care due to cost.(she supposedly checked this out). Employee #2 has his own insurance. The S-corp does not provide any HE for anybody except as noted above. Does S Corp have a problem or not? I am not sure 100% because of discritimate rule. Any help here? Manny Thanks
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If the corporation has any employees, and does not have group insurance, then the premiums paid for the shareholders are subject to FWT, SS & MC tax. They are no longer exempt. The s/h's can still take the deduction on Page 1. -
Maribeth is correctComment
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May want to double check that.... Husband and Wife are treated as 1 as far as aca rules the way I understand. As long as the corp only pays for thier HI, then your ok. The rule is Less than 2 in your group policy its ok to discriminate and not put the HI in boxes 3/5. Different story if they office the insurance to anyone outside of them.
ChrisComment
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So this means the S Corp owes additional ss and mt and state unemp and futa due to this.? I guess the Husband and wife will owe SSt and MT) also. Glad these w-2 and 4th qtr 91 is not filed yet. In looking at their books they never wh for these so I guess grossing up w-2 is the only way to now solve this?Comment
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You will need to gross up the wages. Or, have the shareholders reimburse the corporation for the shareholders' share of the tax.Comment
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DOL weighed in in November. If more than one employee, not more than one in group plan. So, your client has a problem.Comment
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The S_Corp does not offer insurance to anybody period. So does this make a difference? I read some info that says rules as b4 don't exist and then you check some IRS site that read differently. Just trying to cover my backside and theirs.Comment
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Because the S-corp is paying insurance/reimbursing H&W, they DO have a plan and therefore have to follow all the rules, not discriminate, offer to all, etc., or those $100/day/employee penalties kick in. Better to not have a plan, pay health insurance personally, maybe.
If only one employee (which is not your case) then same as prior years, W-2 box 1, etc. Multiple employees, company needs to clean up its act. Fast.Comment
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DOL 6 November 2014, "2 or more employees" not participants, contradicting DOL Technical Release 2013-13 and IRS Notice 2013-54. http://www.dol.gov/ebsa/faqs/faq-aca22.htmlComment
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The way I understand it is S-corp owned by husband/wife = 1 person for ACA HI rules. Regardless... put wife on husbands HI, reimburse/pay just the husband and your under 2 anyway.
ChrisComment
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OP said husband + wife + two more salaried employees. More than 1. More than husband + wife. It's a plan and has to follow reform rules. They cannot deny the other employee that wants in.Comment
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I don't mean to be stupid, but I don't see that anywhere on that link. Am I missing something? As a side note, the Law's terminology of "participant" WAY overrides a FAQ using the word "employee".
I have looked and looked, and I don't see that anywhere. What makes you think that?Comment
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The H and W only have supplemental through the S corp. Employee 1(salaried) is not insured anywhere. Employee 2(salaried) has his own ins outside his employer. This is the only Ins the s-corp has. Would a safe bet be to add the ins to the shareholders w-2, pay the taxes and move on to 2015?Comment
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