No FICA On Health Insurance for the More-Than-2% Shareholder-Employee

No FICA On Health Insurance for the More-Than-2% Shareholder-Employee

Are you running an S corporation?

Then you need to know the answer to this important question…

How should your S corporation treat the more-than-2% shareholder-employee for Social Security, Medicare, and federal unemployment taxes?

You’ll learn how we answer this question and many others when you read my new article titled Tax Tips: No FICA On Health Insurance for the More-Than-2% Shareholder-Employee.

Three ways our fact-filled article can help you:

1. We’ll give you our take on this rather confusing law. Our position is straightforward. We don’t believe that the health-insurance premiums included in the more-than-2% shareholder-employee’s W-2 wages are subject to Social Security or Medicare taxes. (NOTE: The law is not crystal clear on these issues so proceed carefully.) To get full details, read the full article.
2. We’ll explain why you should get your insurance-costs on the corporate books. For the S corporation more-than-2% shareholder employee to have a chance to deduct his or her cost of health insurance, the S corporation has to do one of two things. Either pay the premiums to the insurance company or reimburse the more than-2% shareholder-employee for the cost of his or her individually purchased insurance. We’ll explain these rules in detail when you read the full article.
3. You’ll learn about the tax status of your rank-and-file employees. Frankly, they have less to worry about than you do. You see, the health-insurance premiums paid to cover your rank-and-file workers are generally tax-free to those employees and are tax-deductible by the S corporation as benefits for those employees. You’ll get the whole story when you read the full article.