I have an 1120S K-1 with item in Box 17 Code AD Medical Insurance Premium for > 2% shareholders $ figure. This information was not provided on the employee W-2 where wages were paid. Using Turbo Tax 2022, entered the Box 17 Code AD item and it says this item is not used in program calculations. Switched to FORMS and the form says "* Not provided for in program. Manually enter on appropriate tax form".
sorry, by law that contribution must be included in the W-2 box 1 if not then the S-Corp gets no deduction, and the shareholder gets no deduction.
from the IRS
Notice 2008-1 states that if the shareholder purchased the health insurance in the individual’s own name and paid for it with his own funds, the shareholder would not be allowed an above-the-line deduction. On the other hand, if the corporation obtains and pays for health insurance in its name, covers the shareholder under the policy, and reports the premiums as W-2 wages to the shareholder, then the shareholder is allowed an above-the-line deduction. Similarly, if the shareholder purchased the health insurance in his own name but the S corporation either directly paid for the health insurance or reimbursed the shareholder for the health insurance and also included the premium payment in the shareholder's W-2, the shareholder would be allowed an above-the-line deduction.
The bottom line is that in order for a shareholder to claim an above-the-line (on their 1040) deduction, the health insurance premiums must ultimately be paid by the S corporation and must be reported as taxable compensation in the shareholder's W-2.
you can have the w-2's amended to properly reflect the premiums in your wages.
if not and the S-Corp took a deduction for these premium, then the return is incorrect.
