Business owners who are covering their health insurance premiums through a company in which they are a greater than 2% S-Corp shareholder-employee need to remember that these premiums are deductible by the S-Corp and therefore reportable as wages on the shareholder-employee’s Form W-2 and subject to income tax withholding. You’ll find this additional compensation included in the shareholder-employee’s Box 1 (Wages) of Form W-2, Wage and Tax Statement, but is not included in Boxes 3…
Here at year-end, company personnel responsible for record-keeping should prepare for W-2 and other tax form reporting by collecting their corporate health insurance information. S-Corporations (S-Corps) must segregate payments made to employees, and their spouses and dependents (which are not wages and are therefore not subject to withholding), from payments made on behalf of officers, owners or employees who own more than 2% of the company’s stock. For the latter individuals, the amount paid on…
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