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The cost of health insurance premiums paid by an employer is usually excluded from taxable income on the employee’s W-2. A more than 2% shareholder of an S corporation is not eligible for this exclusion. However, with health Insurance for S Corporation 2% shareholders, the 2% shareholder may be able to deduct the cost of the premiums on his Form 1040. What is a 2% shareholder? A “2% shareholder” is an S corporation shareholder who owns, directly or indirectly , more than 2% of the stock of the corporation on any day during the tax year . Indirect ownership – family attribution rules The following family members of a shareholder are treated as owning a shareholder’s stock for this purpose: Spouse Children Grandchildren Parents Example 1 Karen sells her entire 10% interest in Flagco (a calendar year S corporation) on January 2, 2013. She continues to work at Flagco and receives health insurance through the company. Karen is a 2% shareholder of Flagco for 2013 beca

The Plan ID is a 3-digit number used by the DOL, IRS, and ERISA to identify one employee welfare plan from another of a company’s benefit offerings. The Plan ID is used on all of our Plan Document Packages, including the ERISA Wrap Summary Plan Description.  Companies with 100+ employees will also need it for their Form 5500 filing. Every benefit plan has one Prior to gathering the information needed to order a Core 125 or other plan document package, most employers probably did not know they had or needed a Plan ID. What follows is a brief explanation of what the Plan ID is, where you find one, how to know when to retire one, and how it fits into the full plan number. Finding the Plan ID The Plan ID is a 3-digit number that designates one plan from another for the IRS and DOL. Which number goes to what plan is up to the employer in most cases. In the instructions for Form 5500 , the IRS informs us that Plan ID numbers are to begin with 501 for a company’s first health &