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S corporations: other fringes

February 19, 2009

We continue to get questions on S corporation fringes. From our December 27, 2007 post More on S Corporation Health Insurance comes this question:

Does this ruling and process apply to all insurances (dental/short term disability/supplemental)? I believe we are handling the medical premiums properly, but am not sure about the other insurances.

Many otherwise non-taxable fringe benefits are taxable to 2% or greater owners of S corporations. Notice 2008-1 explains how this affects health insurance, which would include dental insurance; such insurance is included in Box 1 W-2 wages, but not in FICA or Medicare wages.

Non-health fringes, like life insurance, would be includible for Box 1, FICA and Medicare.

Tags: Notice 2008-1.s corporation.