S Corp Shareholders Health Insurance

[Jake]

I realize that health insurance expense for an S. Corp owner/ employee is reported in Box 1 and 14 of the W-2. My question is the expense reported as wages on the 941 and 940. I can tell you that I have never included the expense as wages and have never had any problems with that treatment. I just don't want to start receiving notices from the SSA indicating that the W-2's and 941 don't match. Any ideas on what the correct treatment is?

Thanks

Jake

[JohnH]

I always report it on the 941 and 940 in gross wages, but not in SocSec/FICA. The last thing I do before sending out payroll reports is to verify that the sum of Box 1 of the W-2 forms agrees with the sum of Line 2 of the 941 forms filed for the year, and that that figure appears on line 3 of the 940. ( I also verify that the sum of the W-2 Withholding, SocSec, and Medicare totals proof back to the corresponding lines on the 941's filed for the year.)

[Randall]

If you're preparing both W-2s and 941/940, you can report to make the numbers the same. If you did not prepare these, you can prepare a corrected W-2 for the shareholder/employee to include the health insurance. One issue might be breaking it down on the quarterly 941s, but I've just added it on the 4th quarter 941. Then there's the local income tax. I just add to 4th quarter to make the total annual amount come out correctly.

[imjulier]

How about the dental? Is it treated the same way for S corp shareholders? I've always done the Health Insurance as necessary but not the dental.

Thanks,

Julie R