Treating Medical Insurance Premiums as Wages Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are deductible by the S corporation and reportable as wages on the shareholder-employee’s Form W-2, subject to income tax withholding.

Can an S Corp deduct officer health insurance premiums?

Just like other business structures, S corporations can offer health insurance premium coverage for their non-owner employees as a tax-free fringe benefit. The employee doesn’t get taxed for it, and the company can deduct the contributions on its business tax return.

Can owners of an S corp be sued?

With an S corporation, shareholders can be held liable only for the money they invest in the business. As a result, creditors are unable to seize personal assets in the event of a lawsuit or other loss.

What does a Subchapter’s Corporation stand for?

Named after the section in which it appears within the Federal Internal Revenue Code, the Subchapter S Corporation is an IRS tax election option available to eligible businesses. You have probably heard it called “S Corporation” or “S Corp,” as well.

What is a subchapter in the Internal Revenue Code?

A Subchapter S (S Corporation) is a form of corporation that meets specific Internal Revenue Code requirements. The requirements gives a corporation with 100 shareholders or fewer the benefit of incorporation while being taxed as a partnership.

How are health insurance premiums reported for S corporation?

Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are deductible by the S corporation and reportable as wages on the shareholder-employee’s Form W-2, subject to income tax withholding.

What makes a s Corporation an S corporation?

An S corporation is a regular corporation whose owners, also called shareholders, have elected to apply for S corporation tax status under Subchapter S of the Internal Revenue Service (IRS) tax code. Just like a C corporation, an S corporation is a separate legal entity from its owners.