Today TaxMama hears from Magdalena in the TaxQuips Forum with a puzzler. “I would like to know if I can take the Health Savings Account Deduction on my 1040 if I’m a S-corp owner?”
Hi Magadalena,
Looking through all the information about HSAs, I don’t find any mention of S Corps. So, let’s see if we can think this through, logically, OK?
First, let’s look at what it takes to qualify for an HSA:
Qualifying for an HSA
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
- You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
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- You have no other health coverage except what is permitted under Other health coverage , later.
- You are not enrolled in Medicare.
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- You cannot be claimed as a dependent on someone else’s 2010 tax return.
The very first provision talks about having coverage under a HDHP. It doesn’t say if the plan comes from your employer or on your own. So if you pay for your own health insurance, buy an HDHP – yes, you can qualify for an HSA – regardless of the nature of your business.
Naturally, if your S Corp pays for your health insurance, you know you need to add the premiums to your wages and the S corp must pay the premiums directly to the insurance company.
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And remember, you can find answers to all kinds of questions about HSAs and other tax issues, free. Where? Where else? At www.TaxMama.com.
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