Medical Insurance Premiums for Shareholders of a Subchapter S Corporation

To include the total annual premiums for the employees indicated as an Other Pay for inclusion in the employee’s W2, you will need to enter the amount for each employee as an after the fact payroll check to an Other Income Item which is posting to a statistic account GL account.

To set up a Medical Insurance Premium:

Verify or set up Benefits In/Out GL Account

• The Classification must be Statistic. (Statistic class accounts do not appear on Financial Statements or in the General Ledger reports.

Verify or set up 2% Shareholder Health Insurance Payroll Item

• The Type is Other Income. 
• Select the Benefits In and Out account in the Expense Account field. 
• Check the appropriate boxes in the Exempt From section.
• Select Box 14 in W2 Tracking and enter SH HLTH in the W2 Code field.

Enter After the Fact Payroll Check

• Select the SH Health item and enter the amount. All amounts posted to this item will be included in the amounts in Boxes 1 and 3 of the W2 and will print in box 14 with a label of SH HLTH.