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Hi and welcome to Just Answer!According to IRS publication 15B - www.irs.gov/pub/irs-pdf/p15b.pdf
Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances.Any HSA contributions for 2% shareholders of an S corporation are treated as their after tax contributions. Contributions made by the S corporation (employee) are either included into wages (W2 form box 1) or reported on K-1 based on specific circumstances.
I told the client to book it in box 1 of the W-2 and in just wages on the 941...similar to health insurance for s corp shareholder right???
Yes - very similar. No deductions are allowed for HSA contributions - you may provide pub 15B to your client to support that position.
Perfect wonderful as always...Happy New Year!