Tax Guru-Ker$tetter Letter
Sunday, February 05, 2006
Health Insurance
Q:
Subject: Tax QuestionWhat are the rules governing health insurance premiums for the single shareholder of an S Corp who is also an employee? Is it considered taxable income on the W-2?
A:
Any person owning more than 2% of the S corp stock must report the health insurance premiums as taxable wages on his/her W-2.
As I've mentioned countless times, that is not the case for shareholders of C corps.
Your personal tax advisor can give you more detailed assistance with this.
Kerry Kerstetter