Medical Insurance 2 Shareholder

One such pro is the 2% shareholder health insurance, which is only available to an s corp. An s corp is a company with limited liability for all shareholders and have distributions which are not subject to self-employment tax. They’re the only entity which offers 2% shareholder health insurance, so that keeps at least one aspect straight.. A 2% shareholder may be eligible for an above-the-line deduction on Form 1040 for all premiums paid by him or on his behalf if the medical coverage was established by and paid for by the S corp and the 2% shareholder met other self-employed medical insurance deduction requirements.. Health insurance premiums paid by an S corporation on behalf of its 2 percent shareholders should be reported as wages on shareholder W-2 forms. Too often, these payments are not included in wages because the premiums are paid along with those for rank-and-file employees. From the corporation’s perspective, premiums are different than payroll.. The S corporation pays the health insurance premiums in the current tax year, or The 2% shareholder pays the premiums and furnishes proof of payment to the S corporation, after which the S corporation reimburses the 2% shareholder for the premium payments in the current tax year..

Entering Health Insurance Premiums (W-2) for more than 2% Shareholder in an S-Corporation. Health Insurance Premiums are normally reported in each of the following areas: Somewhere on Form 1120S To the shareholder on Schedule K-1 Box 17 code V Form W-2, box 14 Reporting Health Insurance Premiums.... Shareholder health insurance for a more than 2% owner is to be reported on their W-2, and if possible the shareholder would make an adjustment on the front of their 1040 return. Less than 2% shareholder health insurance is included with the expense for other employees as a deduction by the entity..

Our more-than-2% shareholders get their health insurance paid by the firm. I add it as wages to box 1 of their W-2. I see that in the instructions to the 1120S, it says to put in Box 14 the amounts paid for the health insurance (including that paid for spouse and dependents).. For purposes of this memo "health insurance" includes premiums paid for health, dental, vision, long-term care and HSA contributions made by the corporation on behalf of the 2% or more shareholder (and any payments made on behalf of related parties e.g. spouse and children of 2% shareholder)..