The SEP contribution is an employer contribution, in this case a deductible business expense on the Form 1120-S. The maximum contribution is 25% of wages reported on the W-2 and the same percentage of compensation must be contributed to a SEP IRA for each eligible employee of the S corp. The deadline for S corp can make the contributions to the SEP IRAs is the due date of the S corp's tax return, including extensions. The S corp can do that either periodically or all at once. SEP IRA contributions appear nowhere on a W-2. Your payroll provider has no involvement in making or reporting SEP IRA contributions.
Health insurance premiums paid for a more-than-2% shareholder-employee must be included in wages on the W-2 and the shareholder-employee takes the self-employed health insurance deduction on their individual tax return. If these payments are such that they are not subject to Social Security or Medicare taxes, the payroll company needs to know that these particular wages are for such a health insurance plan so that they can prepare the W-2 properly. When entering the Schedule K-1 (Form 1120-S) into TurboTax for your individual tax return, you must mark the box in TurboTax to indicate you personally paid for health insurance and the S corp paid you wages, then enter the amount of wages from box 5 of your W-2 and the amount you paid for health insurance. TurboTax will put the slef-employed health insurance deduction on Schedule 1 line 17.
