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As a S Corp paying shareholders, is Box 1 Wages + Health insurance and box 12 cost of health insurance?

Forum|Forum|6 years ago
June 1, 2019
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Trying to figure out if Box 1 of W2 needs to include the employer cost of providing health insurance along with wages paid, and secondarily if the employer cost is also documented in box 12 code dd. This is for an S-Corp paying shareholders if that makes a difference.

Best answer by TaxGuyBill

Yes, it needs to be added to Box 1 of the W-2 of the shareholders of an S-corporation.

I'm not sure about Box 12, but unless the corporation has over 250 employees, it is currently not required to use the DD code. Either way, it really wouldn't affect anything. It is just an informational code that does not affect the tax return.

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Inventive1Author

so would I enter then enter zeros in boxes 3 and 5 for social security and medicare wages?

T

TaxGuyBill

Did the corporation not pay wages? The shareholder/employee is REQUIRED to be paid "reasonable compensation" if the corporation was profitable and the shareholder received money from it.

T

TaxGuyBillAnswer

Yes, it needs to be added to Box 1 of the W-2 of the shareholders of an S-corporation.

I'm not sure about Box 12, but unless the corporation has over 250 employees, it is currently not required to use the DD code. Either way, it really wouldn't affect anything. It is just an informational code that does not affect the tax return.