More than 2% owners of a Subchapter S corporation cannot make pre-tax contributions to their HSAs through the company by salary reduction. In addition, any contributions made to their HSAs by the corporation are taxable as income. However, they can make their own personal contributions to their HSAs and take the “above-the-line” deduction on their personal income taxes.
Rules of attribution apply to more than 2% owners of an S corporation, therefore the more than 2% owner’s spouse, parents, children and grandchildren may not contribute to an HSA on a pre-tax basis. However, they may contribute on a post-tax basis and deduct the contribution at the end of the year on their personal tax return.
Category:
Health Savings Account