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Allocation of health/medical insurance premiums to a single shareholder

Under Notice 2008-1, in order for a 2 percent shareholder-employee to deduct the amount of the health insurance premiums under IRC Section 162(l), the S Corporation needs to report the health insurance premiums paid or reimbursed as wages on the 2 percent shareholder-employee's Form W-2 in that same year.
In addition, the shareholder needs to report the premium payments or reimbursements from the S Corporation as gross income on their Form 1040.
note
However, if the health insurance premiums weren't included in the shareholder's Form W-2 and you want to show the premiums on Form 1120S, Schedules K and K-1, enter the appropriate amount in the
Shareholder health insurance
 field for each shareholder by going to
View
,
Shareholder Information
, then the
Other Info
 tab.
UltraTax CS transfers the shareholder health insurance to Schedules K and K-1 based on the option entered in the
Shareholder health insurance shown on Schedules K and K-1
 field in the K screen. If you enter
1
 in this field or if the field is blank, UltraTax CS transfers the amount to Nondeductible expenses on Schedules K and K-1. If you enter
2
 in this field, UltraTax CS transfers the amount to Other items and amounts on Schedules K and K-1.
If the health/medical insurance premiums are included in the shareholder's Form W-2, don't enter the amount in the
Shareholder health insurance
 field in the
Other Info
 tab in the
Shareholder Information
 window unless you want to show the health insurance premiums as Other items and amounts on Schedules K and K-1. To do this, enter
2
 in the
Shareholder health insurance shown on Schedules K and K-1
 field in the K screen.

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