Reminder Regarding Health Insurance For Greater Than 2% Shareholders
December 8, 2021
All S corporations are REQUIRED to include health insurance premium costs as additional wages on box 1 of each greater than 2-percent shareholder-employee’s W-2. The amount included as additional wages is not subject to Social Security (box 3) or Medicare (box 5). Your payroll service provider needs to be informed of the total 2021 premium costs paid to each greater than 2% shareholder-employee before the final payroll is issued for 2021. The failure to include this information could result in the non-deductibility of these premium costs.
This requirement applies only to greater than 2-percent owners of the S corporation W-2’s and not to any other employees. You may also review the IRS publication on this requirement by going to: https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues.
If you have any questions, or need assistance, please contact our office.
Gatto, Pope & Walwick, LLP
Certified Public Accountants