S-Corp and health insurance premiums

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ebeb
Posts: 657
Joined: Sat Dec 23, 2017 1:18 pm

S-Corp and health insurance premiums

Post by ebeb »

Hello,

If a 100% owner of s-corp with no employees buys health insurance from State Health Exchange. If the s-corp pays the monthly premium. The s-corp doesn't run payroll or W2 but issues a year-end Schedule K-1 with income amount. Is the s-corp allowed to consider the premium as expense as the 100% shareholder doesn't deduct the premium from his income. The following example is close but doesnt consider the fact that no wages are paid in my example.

https://www.irs.gov/irb/2008-02_IRB#NOT-2008-1
Example 3. (i) For 2008, shareholder C obtains an accident and health insurance policy in the name of shareholder C. The S corporation makes all the premium payments to the insurance company. The S corporation reports the amount of the premiums as wages on shareholder C’s Form W-2 for 2008 and shareholder C reports that amount as gross income on Form 1040 for 2008.

(ii) A plan providing medical care for shareholder C has been established by the S corporation and shareholder C is allowed the deduction under § 162(l) for 2008.
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