Guidance on Payment of 2% S Corporation Shareholder’s Individual Insurance Premiums
The IRS released guidance for S corporations that pay or reimburse 2% S corporation shareholders for premiums for individual health insurance policies. Based on previous guidance, there has been uncertainty about how arrangements authorized under IRS Notice 2008-1 to reimburse 2% S corporation shareholders for premiums should be treated. The new notice provides that until additional guidance is issued, and at least through calendar-year 2015, the IRS will not assert the excise tax under IRC Sec. 4980D with regard to a health care arrangement of a 2% S corporation shareholder employee.