Business Tax Planning

[joeserrone]

Hello Everyone! I have a question for the community....

An LLC Taxed as an S Corporation has three partners all of them family members, Partner A (dad) owns 34% of the business, Partner B (wife) 33%, and Partner B (Child) 33%. The Dad and Child are insured under a family health insurance plan purchased through the Healthcare.gov website. The wife because of disability is receiving insurance through Medicare.

Can the S Corporation still reimburse the premiums for health insurance to the Dad and his Wife, as long as this premium is included in Box 1 of their W2 for Wages and Salaries, which then allows them to deduct the premiums as Self-employment insurance on the 1040?

I read the IRS Notice 2015-17 while the notice states that since all employees are family and can be considered one employee and therefore not subject to ACA changes, the notice implies that the family must be covered under the same plan.

[JMO]

S-Corp Reimbursement for Health Insurance

The S-Corp can reimburse even if the policies are in each of the shareholder-employee's separate names, as long as the shareholder-employee receiving a reimbursement actively participates in the business and is on payroll. [The reimbursement for each shareholder-employee can cover themselves+spouse+dependent children]. The company reimbursement can be performed either (1) via direct payment by the company OR (2) submitted for reimbursement by shareholder-employee through a formal Accountable Reimbursement Plan. Yes, you would use Box 1.