Why is my s-corp owners insurance not subtracted from line 3 and 5 on my w2?

Answer

Hello there, xquiky,

Let's ensure your S-corp insurance is set up correctly on the employee's information.

S-corp owner's health insurance is subject to federal withholding tax, but exempt from Social Security, Medicare, and Federal Unemployment Tax (FUTA).

It'll be reported in W2 boxes 1 and 14. Since it's only taxable in the federal income tax, it'll not be deducted in boxes 3 and 5 in your W2 form.

But please take note that the cost of the shareholder's premiums will be fully taxable if they participate in a different plan that's offered to all employees.

For further details, you can check out this article: Supported Pay Types and Deductions Explained.

Here's how to examine if you've correctly inputted the right S-corp set up in the system:

  1. Go to Workers, then choose Employees.
  2. Select the employee's name
  3. Select the Edit (pencil) icon beside Pay.
  4. Under the How much do you pay this employee section, select the Edit (pencil) icon.
  5. choose S-Corp Owner's Insurance.
  6. You can add the Recurring amount. Or leave it blank. 
  7. You'll have the option to enter the S-corp amount when you run payroll.
  8. Select Done.

For more information about W2 and W3 forms, you can visit this article: General information and reports for W-2 and W-3 forms.

Should you have further questions about payroll pay types and how are they calculated, please feel free to leave a comment below. I'm just around to help.

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IntuitRea , Community Support Specialist
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