As an owner of a small business (LLC) that registered as an S Corp -- we now see the owner and adult independent family members (non-owners) are denied the benefit of pre-tax deductions for health insurance. Would like to know (1) the reasoning behind this, and (2) what options are available to make health insurance for these people affordable.
I am not sure that I understand the first part of your question. Who has denied the owner's use of the pre-tax benefit? Some States offer tax credits or a premium subsidy to certain small employers that provide health insurance to their employees, so this could be a question for either your state revenue department or the IRS, depending on the circumstances.
You can read about your rights to getting and keeping self-employed healthcare coverage at healthcare.gov. To determine if your small business or tax exempt organization qualifies for the Small Business Health Care Tax Credit, follow this IRS fact sheet.
NicoleD | Former Moderator | 9/20/2010 - 9:53 am
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