How is shareholder health insurance on W-2?

Premiums Must Be Included on the Shareholder’s W-2 As mentioned, for income tax withholding purposes, accident and health insurance premiums need to be treated as shareholder compensation—which means that premiums for the shareholder’s health benefits need to be included as wages on the shareholder’s form W-2.

Where does shareholder health insurance go on W-2?

Treating Medical Insurance Premiums as Wages Therefore, the additional compensation is included in the shareholder-employee’s Box 1 (Wages) of Form W-2, Wage and Tax Statement, but is not included in Boxes 3 and 5 of Form W-2.

What box does 2 shareholder health insurance?

Box 1
The cost of health insurance premiums paid by the S corporation for a 2% shareholder is included in the shareholder’s W-2 as Box 1 taxable income. The amount is subject to federal income tax withholding.

Where do I report 2 shareholder health insurance on 1040?

Each 2% shareholder/employee, partner, and LLC member may take the deduction on Form 1040, line 29. If you were a more-than-2% shareholder/employee of an S corporation, the health insurance premiums paid on your behalf would be included in your gross wages on your W-2.

How do I report health insurance premiums on my W2?

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD.

What is the W2 code for box 14?

There’s no standard list of W2 codes for Box 14, so employers can list any description they choose for 2% health premiums including SCORP, SEHLTH, INS, etc. This is the amount the shareholder deducts on Line 16, Schedule 1 (Form 1040) as a self-employed health insurance deduction. Treatment by 2% Shareholder-Employee

Where are health insurance premiums reported on W-2?

The premiums are NOT includable in Boxes 3 and 5 of Form W-2 and are not subject to Social Security or Medicare (FICA), or Unemployment (FUTA) taxes. The health insurance premiums paid by the S corporation are reported on Form W-2, Box 14.

When to report health insurance premiums for 2% shareholder employees?

With three weeks remaining in 2020, we want to remind you of specific year-end payroll processes as it relates to reporting health insurance premiums for 2% Shareholder-Employees.

Where to report health insurance premiums for S Corp?

The health insurance premiums paid by the S corporation are reported on Form W-2, Box 14. There’s no standard list of W-2 codes for Box 14, so employers can list any description they choose for 2% health premiums including SCORP, SEHLTH, INS, etc.