Can my S Corp deduct the health care premiums paid for healthcare plan purchased through Affordable Care Act that is subsidized?

In my s corp business tax return, in the Medical Insurance Premiums section for deductions, it states the following:

"An S corporation can deduct the cost of medical insurance premiums paid for a shareholder-employee who owns more than 2% of the corporation's stock. The corporation must include the premium on the shareholder's W-2. That shareholder may deduct the premium amount as a self-employed health insurance deduction on Form 1040, line 29. Note: The medical insurance deduction may not exceed the shareholder-employee's wages from the S corporation."

If the medical insurance plan was bought through healthcare.gov and a portion is subsidized, does this change the rule as stated above? Can this expense still be deducted by the S corp?

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1 Best answer

Level 9

Jun 4, 2019 10:14:15 PM

Yes, it can still be deducted by the S-corporation (assuming the corporation paid for it or reimbursed you for those expenses).

In my opinion, the corporation should be paying/reimbursing the full amount of insurance (before the 'subsidy').

Level 9

Jun 4, 2019 10:14:15 PM

Yes, it can still be deducted by the S-corporation (assuming the corporation paid for it or reimbursed you for those expenses).

In my opinion, the corporation should be paying/reimbursing the full amount of insurance (before the 'subsidy').

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Can my S Corp deduct the health care premiums paid for healthcare plan purchased through Affordable Care Act that is subsidized?