Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance premiums (not group policy). Are wife's premiums as additional comp on K-1?

inoss — Thu, 26 Dec 2019 21:04:06 GMT

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance premiums (not group policy). Are wife's premiums as additional comp on K-1?

inoss — Thu, 26 Dec 2019 21:27:59 GMT

Correction... on W-2 for owner and W-2 for Wife

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance prem...

WillK — Tue, 07 Jan 2020 22:40:01 GMT

Possibly. If the S-Corporation is reimbursing a greater than 2% owner for after-tax health insurance premiums that were paid personally, the S-Corporation would have a deductible health insurance expense for that reimbursement and the owner (shareholder) of the company, would have a taxable fringe benefit. This fringe benefit is reported on the shareholder's W-2 subject to federal and state tax withholding but not subject to Social Security or Medicare taxes. The shareholder would then claim the self-employed health insurance deduction on their personal tax return.

If your wife does not own greater than 2% of the company and is reimbursed for health insurance premiums, it may have to be reported as additional compensation subject to federal and state withholding as well as Social Security and Medicare taxes (if it is a discriminatory reimbursement, meaning not all employees receive the same benefit) or it may be a completely nontaxable benefit (if all employees receive the same benefit).

If the policy covers the owner and the spouse, and the spouse is an employee that does not own more than 2% of the company, The reimbursement should be added to the owner's W-2 only (not subject to Social Security or Medicare taxes) and not the spouse's. It would then be a deduction to the S-Corporation and the owner would take the self-employed health insurance deduction on their personal tax return.

For additional information on health reimbursements to a > 2% owner, please see Solved: My single owner Scorp company paid my health ...

For additional information on health reimbursements for employees who are not >2% owners, please see Solved: I have a small business with 3 employees including ...

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance prem...

inoss — Wed, 08 Jan 2020 16:13:42 GMT

Thank you! Very helpful.

topic Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance premiums (not group policy). Are wife's premiums as additional comp on K-1? in Get your taxes done using TurboTax

Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance premiums (not group policy). Are wife's premiums as additional comp on K-1?

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance premiums (not group policy). Are wife's premiums as additional comp on K-1?

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance prem...

Re: Single-member LLC, S-Corp. Wife is an employee. We get payments for our health insurance prem...