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Office Closure: Beginning July 2, the Delap office will close for an interior remodel. The remodel project has been in the works for months and will include an updated reception area as well as new and improved conference rooms. The project is scheduled to last a few months, with the office anticipated to reopen sometime around the holidays. We will continue to assist our clients with their accounting and advisory needs during the remodel, and we appreciate your patience and understanding during this renovation process.
Health insurance premiums paid on behalf of a shareholder greater than 2%, are deductible and reportable by the S corporation as wages for income tax withholding purposes on the shareholder's Form W-2.
These benefits are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA) taxes. The additional compensation is included in Box 1 (Wages) of the Form W-2, Wage and Tax Statement issued to the shareholder, but would not be included in Boxes 3 and 5 of Form W-2.
A 2% shareholder is eligible for a deduction in arriving at Adjusted Gross Income (AGI) for amounts paid during the year for medical care premiums if the medical care coverage is established by the S corporation, and the shareholder meets the other self-employed medical insurance deduction requirements. A deduction used to arrive at AGI is referred to as an above-the-line deduction. However, if the shareholder or the shareholder’s spouse is eligible to participate in any subsidized health care plan, then the shareholder is not entitled to the above-the-line deduction.
A medical plan can be considered established by the S corporation if the S corporation paid or reimbursed the shareholder-employee for premiums and reported: