Article Date:
September 2019

Word Count:



Q&A: No FICA on Health Insurance for the More-Than-2% Shareholder-Employee



I am a partner in a CPA firm that has many S corporation clients.


Most of our S corporation clients have fewer than 50 employees, making them exempt from the Affordable Care Act.


My question concerns S corporations that pay for health insurance on the more-than-2-percent shareholder-employees but do not provide any health insurance to their rank-and-file employees.


We properly add the premiums to the more-than-2-percent shareholder-employee’s wages, making those wages subject to income taxation. But we do not make those wages subject to Social Security and Medicare taxes.


Some of my partners disagree with this treatment and believe that the wages are subject to Social Security and Medicare taxes.


What’s your take on this? ... Log in to view full article.

Log in to view full article

Already a subscriber?

Email Address


Log In Send me my password

You'll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter

Not yet a subscriber?
with a money-back guarantee