SCorpDesk / 2026 S-Corp & QBI Guides / 2026 2% S-Corp Shareholder Health Insurance Deduction (W-2 Box 1, Box 14 & Form 7206)
2026 2% S-Corp Shareholder Health Insurance Deduction (W-2 Box 1, Box 14 & Form 7206)
How do you deduct health insurance for a 2% S-Corporation shareholder in 2026?
Under IRC Section 162(l) and Notice 2008-1, the S-Corporation must pay or reimburse the shareholder health insurance premiums and include them in the shareholder Form W-2 Box 1 (federal wages) and Box 14 (SCORP), while excluding them from Box 3 (Social Security) and Box 5 (Medicare). The owner then claims an above-the-line deduction on Form 1040 Schedule 1 (Form 7206).
Under IRC Section 162(l) and Notice 2008-1, the S-Corporation must pay or reimburse the shareholder health insurance premiums and include them in the shareholder Form W-2 Box 1 (federal wages) and Box 14 (SCORP), while excluding them from Box 3 (Social Security) and Box 5 (Medicare). The owner then claims an above-the-line deduction on Form 1040 Schedule 1 (Form 7206).
Frequently Asked Questions
How do you deduct health insurance for a 2% S-Corporation shareholder in 2026?
Under IRC Section 162(l) and Notice 2008-1, the S-Corporation must pay or reimburse the shareholder health insurance premiums and include them in the shareholder Form W-2 Box 1 (federal wages) and Box 14 (SCORP), while excluding them from Box 3 (Social Security) and Box 5 (Medicare). The owner then claims an above-the-line deduction on Form 1040 Schedule 1 (Form 7206).