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S-Corp medical insurance premiums deduction for its owners


Question: I am the 100% owner of a S-Corporation. Can I deduct medical insurance premium through the corporation? I purchased the insurance under my name and paid myself.

Answer: If you are over 2% shareholder of the S Corp, you can deduct the medical insurance premium paid or reimbursed through the S Corp. However, the S Corp must report the amount as wages on W-2 box 1. If the insurance plan is non discriminatory and offered to all other employees, the cost of the premium is not subject to FICA and FUTA.

The shareholder is allowed to purchase the insurance himself and even paying himself as long as 1. The company reimbursed the shareholder. 2. The premium payment is reported on the W-2 on the shareholder.

If you would like to make an appointment to discuss more, please give this office a call 415-704-8989 or email me at ymckee@virtualcpaforyou.com. Book a meeting online. More articles see www.virtualcpaforyou.com

Circular 230:The articles are for general information only. In accordance with IRS Circular 230 they are not considered tax opinions for purposes of relying on such statements in any challenge of the reporting of the above transaction by the IRS. If a full tax opinion is required certain procedures must be met . Also there is a significant cost for a full tax opinion to meet the requirements of Circular 230.


CPA San Jose, CPA San Francisco  

T: 888-388-1422

T: 415-704-8989

F: 415-805-8934

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