It’s not very often we get to use a headline like the one above! Since the passage of Obamacare in March of 2010, there’s been a raging debate as to whether S-Corp owners would keep the favorable tax treatment that they were given in 2008. The outlook was bleak due to conflicting definitions of much of the tax terminology in the Affordable Care Act. Terms were defined one way by IRS, another by DOL, and yet a third way by HHS. It’s been an acronym soup to interpret.
Here’s the good news – as of December 19, 2014, IRS has updated their website with specific instructions on this topic. You can read their post with this link, but suffice to say that for more than 2% shareholders you’ll be able to gain the same tax-favorable treatment on your health insurance premiums that you’ve enjoyed the last six years.
You should be aware that this applies to stockholders only. If you’ve reimbursed your non-owner employees for their individual policies (allowed under pre-Obamacare law) you are in violation of the law and subject to an extremely large penalty.
If we prepare your payroll returns, be sure that you send us your medical insurance premiums as soon as possible.
If you use one of the payroll services, contact them immediately with this favorable news.
- Estate Planning under the Biden Administration:
What's changing and how to react- April 7, 2021
- Thanksgiving Items - November 25, 2020
- Do you receive Social Security, Civil Service, or VA Benefits:
There's some good news and some bad news- November 23, 2020