Answers · S corporations
Can an S Corporation Deduct Health Insurance for an Owner?
More-than-2% S corporation shareholder health insurance can receive special treatment when the corporation pays/reimburses and reports premiums correctly.
How it works
The rule, and what it turns on.
Qualifying premiums generally are included in W-2 Box 1 and may support the shareholder’s IRC §162(l) deduction, subject to limitations.
Example
$12,000 of qualifying premiums properly paid/reimbursed by the corporation can be W-2 reported and potentially deducted by the shareholder.
Common mistakes
What we see go wrong, and what we do instead.
- Paying personally with no corporate reimbursement/plan.
- Missing W-2 reporting.
A better approach
- Run the year-end health-insurance adjustment through payroll before W-2s.
Authority
Where this comes from, so you can check it.
IRC §§162(l), 1372; Notice 2008-1; Form 1120-S instructions.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
Also asked
The same question, the other ways people put it.
- How Are S Corporation Owner Health Insurance Premiums Reported?
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