BillM223
Expert Alumni

Business & farm

Medical insurance for a 2% or more owner of an 1120-S is not listed as a "insurance, health, and other benefits" - I believe this line is reserved for "normal employees" which the 2% or more owner is not.

 

Instead, the medical premiums paid on behalf of the 2% or more owner is added to Wages in Box 1 of the 2% or more owner's W-2. (Note: it is not added to Boxes 3 or 5, because medical and hospitalization expenses - which health insurance is - are not subject to FICA taxes). So, as I remember, the health insurance premiums of the 2% or more owner are added to Salary and wages (you might check that).

 

Then, on your 1040 return, the 2% or more owner is able to take the self-employed health insurance above-the-line deduction on line 16 of Schedule 1 (1040).

 

So you get the benefit, just not the way you'd expect.

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