The owner is subject to the S Corp rules for the Greater than 2% shareholder rule. Therefore the company pays 100% of her premium expenses for health, dental, vision, etc. We have tracked these amounts for the year, and now need to add these to wages as taxable income subject to FICA but not withholding. How do we do that? Is it done through an adjustment?
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Shareholder Benefits paid by company
Best answer by Sonia Echols
Hi Kerrim,
My apologies that you did not receive a timely response.
For a >2% S-Corp shareholder, the health insurance premiums paid by the company are typically added to taxable wages for reporting purposes, but they are not paid out through payroll.
In Acumatica Payroll, this is usually handled by setting up a non-payable benefit that affects the applicable tax calculations. You can then add the amount through a payroll adjustment (or on a paycheck) so it updates the employee’s taxable wages and W-2 reporting without impacting the net pay.
As always, it’s a good idea to confirm the exact setup with your payroll specialist or tax advisor to ensure the taxes and reporting are handled correctly.
Sonia Echols
+1Hi Kerrim,
My apologies that you did not receive a timely response.
For a >2% S-Corp shareholder, the health insurance premiums paid by the company are typically added to taxable wages for reporting purposes, but they are not paid out through payroll.
In Acumatica Payroll, this is usually handled by setting up a non-payable benefit that affects the applicable tax calculations. You can then add the amount through a payroll adjustment (or on a paycheck) so it updates the employee’s taxable wages and W-2 reporting without impacting the net pay.
As always, it’s a good idea to confirm the exact setup with your payroll specialist or tax advisor to ensure the taxes and reporting are handled correctly.
Sonia Echols
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