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T
TByersTX
October 10, 2024
Question

S Corp Owner Health Insurance

  • October 10, 2024
  • 1 reply
  • 0 views

My S Corp pays my healthcare premiums.  My CPA says this amount needs to be included in Box 1 of my W2.  I don't receive a paycheck every month.  Just 3-4 times a year.  At the end of the year, is there any way my premium total for the year can be added to Box 1 of the W2?  The help articles don't seem to help, and I can't understand the customer service rep on the phone.  The chat help insists it goes in Box 14.  My CPA doesn't agree.  HELP!  How do I simply correct my W2 at the end of the year?  Box 1 only!  Thanks in advance!

1 reply

T
Teri11_2
January 13, 2025

The amount is added to amount in W-2 Box 1 AND also Referenced in Box 14. Here is what is happening:

Amount your company pays for your health insurance must be added to your gross pay to be payroll taxed. Since that amount is not actually paid to you, it is paid to insurance company, it is called "imputed income" that is added to gross, taxed and then deducted from amount paid to you. Best to do each pay period but also ok to do all at one time before year end. Reason for doing more often is to get that tax paid sooner vs. later. When you add total onto one paycheck, remember the tax amount due for that one paycheck will be whole year worth of tax paid on that insurance amount. I'm no tax accountant but have been S-Corp owner 15 years and have done accounting for almost 40 years. My S-Corp pays my health insurance so I know this well. I also have had over 100 clients who are S-Corp and works the same for all and has been the same for years.

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