here is from the IRS instructions for the line for compensation to officers
Report amounts paid for health
insurance coverage for a more-than-2%
shareholder (including that shareholder's
spouse, dependents, and any children
under age 27 who aren't dependents) as
an information item in box 14 of that
shareholder's Form W-2. A more-than-2%
shareholder may be allowed to deduct
such amounts on Schedule 1 (Form 1040
or 1040-SR), line 16. To find out if the
shareholder can claim this deduction, see
Self-Employed Health Insurance
so the answer is it goes on your w-2 as line 1 compensation and is added to the compensation to officers on line 7 on the 1120S page 1.
failure to include it on w-2, if caught, then corp gets no deduction and shareholder gets no deduction on 1040.
the amount included in wages is then footnoted in box 14 of w-2. when doing 1040, you'll have to input this amount to get the deduction. the IRS should really add a code for box 12, but it doesn't exist presently
you can also include the amount as a footnote for line 17d of Schedule K.
