Thank you for your comment. 2% or greater shareholder of s-corps will not be eligible for the tax credit. I am not a CPA so I am not giving you adivce on your taxes but I will tell you what I know about how to save tax on your health insurance. The s-corp is a “pass through” entitiy–meaning your income/profits pass to your personal 1040 through a k-1 that you will get from your s-corp (you are not taxed on the corporate level–just the personal level; no double taxation!). I have an s-corp too. I spoke with my accountant and he told me that I should continue paying for my health insurance (personal plan) on my own through my own personal checking account. So, you do not need to pay your health insurance premiums for yourself through your business. At the end of the year you should be able to deduct all your health insurance premiums from your taxable income on your 1040. This keeps it simple. Hope that helps!

Thanks for making the blog! I am in the process of setting up my one man s-corp and I am trying to figure out if I can take advantage of this new tax credit and if so how. I currently have a personal health plan (PPO) as before I started this s-corp I was a contractor using 1099’s and on my own. I plan on running payroll once a month for myself to meet the salary requirement of the IRS and it seems from what I read that I can add a healthcare componet to the payroll process. I wonder if you could give an example on how soneone in my situation would want to set things up to meet the requirments of this new credit.
Thanks!