S Corp Medical Insurance in QuickBooks Desktop

December 4, 2023

12:08 AM

The insurance you offered to S Corp 2% (or higher) shareholders as well as the rest of your employees determines the tax treatment for S Corp insurance. It also determines how you set up this non-cash fringe benefit in QuickBooks Desktop payroll. .....

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First paragraph a little vague

You talk about plans being offered to subchapter S employees and shareholders, but you don't clarify about shareholder employees being reimbursed for their personal health insurance and the tax consequences of that. Our state doesn't allow group health plans for one employee Subchapter S corporations and that employee is the shareholder and thus the company reimburses that shareholder owner for his personal health insurance costs and processes it as box 1 wages and is taxable for federal and state but is not FICA taxable. But if you have a company where you reimburse the shareholder owner for his personal health but there are other employees that are on medicare, those are definite different plans and still no group plan is there. So how is that interpreted? Is that offering a different plan? There is no other plan being offered. Thanks.

Linda Rogers more than 2 years ago

Methodology is what's available in QBDT Payroll

This feature explains the methodology within Intuit's QuickBooks Desktop Payroll, it doesn't attempt to look at the wide number of variations that may exist based on state rules/regulations. Nor is it provide 'tax guidance' relative to any individual situation, for that you should consult with your Tax Advisor or Tax Preparer.

insightfulaccountant.com more than 2 years ago