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Medical reimbursement plan for less then 2% owner of S corp

by wildsunflowers, Window Shopper

  • Created: June 30, 2009, 3:51 pm
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2 comments

I just set up LLC with me being a 98% owner and my husband less then 2%, and elected to file as S. He is an employee of the business with minimum salary. It was suggested to me that we could create a Medical Reimbursement Plan to cover his (and mine as his spouse) medical expenses under MERP and since he is <2% owner this would not have to be added to his W2.  

Is that indeed a possibility? Thank you for any help. 

Tags: Discuss Popular Topics, Filing and Paying Taxes
‹ Would I be Sole Proprietor or Partnership? How to report non-traditional income (profit from website in someone else's name) ›

jbeidle | Contributor | 7/9/2009 - 1:20 am

Unfortunately it is not your husband's ownership that is the issue, it is yours. You own more than 10%. If medical expenses are the fringe benefit you are looking to cover, I would suggest an HSA for an S-corp. Feel free to contact me through my website http://www.1040WealthDesigns.com Message Edited by JamieD on 07-13-2009 03:33 PM
Professional Web Site: http://TaxPanningStL.com

NicoleD | Former Moderator | 7/5/2009 - 10:58 pm

Wildsunflowers - Interesting question.... I am going to move your post over to the Loans, Grants, and Taxes board where members with experience in this area can offer feeback.