Specifically, are the premiums paid by S-Corp deducted on the return as a line item deduction as health insurance and included in wages?
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The health insurance paid by the S corp for the 2% shareholder is included in wages. It's added to box 1 of the W-2 form. Therefore, health insurance is reduced by this amount and wages are increased by the same amount. It's a reclassification of health insurance expense to wages expense basically. -
In addition to the good information from the other reply post, the following Author’s Comment from TTB may also be of interest:
TTB 19-16
Fringe Benefits for S Corporation Shareholders
Author’s Comment: Since the health insurance premiums are generally exempt from FICA tax, the employee needs to earn additional wages from the S corporation in an amount at least equal to the insurance premiums to ensure a full deduction Last edited by TAXNJ; 06-17-2021, 05:55 AM.Always cite your source for support to defend your opinionComment
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Yes. I'm asking about withholding taxes. How handled?Comment
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Nothing to withhold from the insurance premiums. If the shareholders want to increase their withholding on their wages, they can do so."Taxation is the price we pay for failing to build a civilized society." ~ Mark SkousenComment
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Originally posted by S&D Associates View Post
You have two posts (one yesterday and this one from last year) related to this same scenario (a year apart).
Again check:
TTB 19-16. Fringe Benefits for S Corporation Shareholders. There is information that answers your scenarios in addition to the reply posts.Last edited by TAXNJ; 06-17-2021, 05:53 AM.Always cite your source for support to defend your opinionComment
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