I am a s-corp shareholder/owner. Can the s-corp pays for my health insurance directly to the provider. How can I report it in W-2 form?

Hi there, nutesnoodle,

I can share some information about S-Corp Owners Health Insurance in QuickBooks Online.

Presently, QuickBooks enables you to set up and record S-Corp health insurance in your online payroll account. However, there isn't any automation for our system to allow S-Corp to pay your health insurance provider.

You'll need to get in touch with your health provider for your payment options.

Also, your S-Corp Owners Health Insurance is reported in Box 1 and the $ amount in box 14 with "S CORP OWNER". You just need to make sure you add the item to the employee. Here's how:

1. Click Workers from the left navigation panel.
2. Go to the Employees tab.
3. Select the name of the employee you want to pay S-corp owners health insurance amount.
4. Click Edit employee.
5. Below How much do you pay this employee, click Even more ways to pay [Employee Name].
6. Select the S-Corp Owners Health Insurance checkbox.
7. Add the rate in the Recurring amount field.
8. Click Done.

You can check out this article to know more about setting up S-corp: S-Corp health insurance

That should do it, nutesnoodle. Please notify me if you need further assistance. I'll be more than happy to help you anytime. Have a good one!

The question in this thread was asked several times, without a good explanation, about why the S-Corp owner's health insurance premium isn't included in the net pay, it only shows as other pay. The purpose of using the S-Corp owner's health insurance premium pay type in payroll is to allow the premium to be taxed and reported as wages on the W2 and on the P&L. 

If you want to reimburse the owner through payroll for the premiums they paid personally, you would add another payroll item called something like Health Insurance premium reimbursements, which would increase their net pay. But you have to remember to map that reimbursement item to the same account the S-corp owner's health insurance premium is mapped to in payroll settings. (i.e. S-Corp liability account)

In payroll settings, map the S-corp Owners Health Insurance to the S-corp liability account. Then when the medical premiums are paid by the S-corp, (either through reimbursement in payroll as mentioned above, or by a separate check to the owner or health insurance company), be sure it is posted to the same S-corp liability account, reducing the liability to zero, washing it out. 

see: https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues#treating

"Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are deductible by the S corporation and reportable as wages on the shareholder-employee's Form W-2, subject to income tax withholding. However, these additional wages are not subject to Social Security, or Medicare (FICA), or Unemployment (FUTA) taxes if the payments of premiums are made to or on behalf of an employee - The bottom line is that in order for a shareholder to claim an above-the-line deduction, the health insurance premiums must ultimately be paid by the S corporation and must be reported as taxable compensation in the shareholder's W-2."