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How are contributions treated for owners and shareholders of S corps?

April 26, 2017contributions Corps owners Shareholders treated

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How are contributions treated for owners and shareholders of S corps?

3 Answers

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Owners and officers with greater than 2% share of a Subchapter S corporation cannot make pre-tax contributions to their HSAs through the company by salary reduction. In addition, any contributions made to their HSAs by the corporation are taxable as income. However, they can make their own personal contributions to their HSAs and take the “above-the-line” deduction on their personal income taxes.

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A. Owners and officers with greater than 2% share of a Subchapter S corporation cannot make pre-tax contributions to their HSAs through the company by salary reduction. In addition, any contributions made to their HSAs by the corporation are taxable as income. However, they can make their own personal contributions to their HSAs and take the “above-the-line” deduction on their personal income taxes.

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Owners and officers with greater than 2% share of a Subchapter S corporation cannot make pre-tax contributions to their Health Savings Accounts through the company by salary reduction. In addition, any contributions made to their Health Savings Accounts by the corporation are taxable as income. However, they can make their own personal contributions to their Health Savings Accounts and take the “above-the-line” deduction on their personal income taxes.