The bottom line is that in order for a shareholder to claim an above-the-line deduction, the health insurance premiums must ultimately be paid by the S corporation and must be reported as taxable …

Master health insurance s corporation rules for 2% shareholders. Learn how to handle premiums, choose plans, and maintain IRS compliance.

Health insurance premiums paid by an S corporation for 2% shareholders (and their families) are taxable and must be included in their wages for income tax purposes.

If an S-Corp owner wants to prioritize higher retirement contributions, they may opt to increase their W-2 salary to allow for larger tax-deferred employee contributions.

Dec 7, 2022 · Annual reminder for S-Corp Owners to include health insurance premiums paid for 2% shareholder-employee on W-2.

May 13, 2025 · To qualify, the S corp must either pay or reimburse premiums and include the amount in the shareholder’s W-2. Health reimbursement arrangements (HRAs) generally do not apply to 2% S …

Oct 4, 2024 · Add Premiums to Wages: The S Corporation must add the cost of the health insurance premiums paid on behalf of the 2% shareholder to their gross wages on their W-2 form in Box 1 …

Oct 1, 2024 · Shareholders of an S corporation receive compensation and distributions based on their roles within the company. Shareholder-employees, for instance, are required to pay themselves …

If you own more than 2% of an S corporation, your health insurance must be paid or reimbursed by the business. The premiums must be reported on your W-2 as shareholder wages.