Monday, October 21, 2019
 

IRS Releases Memo on 2-percent Shareholders' Health Coverage Deductions

Brought to you by:

http://www.jaxbenefits.com

Coordinated Benefits Group

(904) 281-0511
info@jaxbenefits.com

The Internal Revenue Service (IRS) released a memorandum to confirm that a person who is a 2-percent shareholder (through Internal Revenue Code §318’s attribution rules) in an S corporation is entitled to a deduction for the amounts paid by the S corporation under a group health plan.

For the 2-percent shareholder to deduct the health insurance premium amounts, the S corporation must report the health insurance premiums paid or reimbursed as wages on the 2-percent shareholder’s Form W-2 in that same year. Also, the shareholder must report the premium payments or reimbursements from the S corporation as gross income on the Form 1040, U.S. Individual Tax Return.

Copyright © 2001-2012 United Benefit Advisors, LLC. All Rights Reserved Terms Of Use Privacy Statement