S Corp Shareholder W2

[Randall]

Last year there was a late DOL ruling changing the way we prepare W2s for S Corp shareholder/employees.  Then IRS issued Notice 2015-17.  My understanding is if the S shareholder/employee is the only employee, this is an exception to ACA and amounts paid for health insurance will be reported on the W2 as in the past.  Added to wages subject to income tax but not to FICA tax.  If there are other employees, the IRS notice allows the same reporting for the S shareholder/employee thru 2015.  After 2015, must be reported as wages for both income tax and FICA tax.  If fewer than 50 employees, any reimbursement to employees for health insurance must not be required to pay for health insurance (and should not be considered as reimbursement for health insurance) and should be reported as income for both income tax and FICA tax.  If there is a group plan compliant with ACA, then it can be treated as a nontaxable benefit as previously done.

In preparing the upcoming W2, I understand that the S shareholder's W2 can be prepared as before, included in Box 1, but not in Boxes 3 and 5 (even if there are other employees).  Is this how others understand this and will be approaching the 2015 W2s?

[Abby Normal]

Yes, that's what I remember hearing earlier this year. Hopefully they will fix this going forward.