Health Insurance for S Corporation 2% Shareholders: Reporting to the shareholder. The cost of health insurance premiums paid by the S corporation for a 2% shareholder is included in the shareholder’s W-2 as Box 1 taxable income. The amount is subject to federal income tax withholding.

Are health insurance premiums included in Box 1?

You’ll need to review your paycheck stub to determine when you pay for health insurance. Also, if you have pre-tax amounts withheld from your paycheck for your insurance, the amount on your W-2, Box 1 won’t include the cost of your health insurance.

Where are health insurance premiums reported on a S corporation?

Health and accident insurance premiums paid on behalf of a 2% S corporation shareholder-employee should be reported as wages on the shareholder-employee’s Form W-2, subject to income tax withholding.

Can you deduct health insurance on box 5?

If your box 5 wages don’t cover all your health insurance premiums, you can still deduct the balance of your health insurance cost amount on Sched A, but only the portion that exceeds 10% of your income….but that’s not nearly as sweet as a line 29 deduction. June 6, 2019 2:47 AM

How does the ACA affect s Corp health insurance?

For you, a 2% or more S corp shareholder, the Affordable Care Act (ACA) doesn’t affect how you deduct your S corp-provided health insurance benefits. Things get sticky for your employees, however. The ACA requires that S corporations establish group health insurance plans instead of reimbursing employees for their individual plan costs.

Where are health insurance premiums reported on a W-2?

The health insurance premiums are additional wages reportable in Box 1 (Wages) of Form W-2, and Box 16 (State Wages) and are subject to Federal and State income tax withholding only, computed using the rules for withholding on supplemental wages.