The S-Corp Health Insurance Deduction in Nevada

Short answer: if you own more than 2% of an S corporation in Nevada, the company pays or reimburses your health insurance premiums and puts them in Box 1 of your W-2 as wages, but not in the Social Security and Medicare boxes. You then take them back off your income as the self-employed health insurance deduction, on Form 7206 and Schedule 1, line 17. In Nevada there is no state income tax, so the saving is federal. (Reviewed November 2026 by Daniel Griffin, licensed independent advisor, NPN #22052447. Not tax advice; confirm with your tax preparer.)

• $5,638a year of Anthem’s lowest-cost 2027 Silver plan for a 40-year-old in Las Vegas
• $863of Social Security and Medicare tax a Nevada owner skips on it, against the same amount paid as salary under $192,300
• Box 1where those premiums land on your W-2; Boxes 3 and 5 stay clear of them
• 1.17%Nevada payroll tax, figured after the employee health benefits a company pays

How the Money Moves in Nevada

1. Buy the planA Nevada Health Link plan or a private plan, in your name or the company’s.
2. The S corp pays$470 a month for a 40-year-old’s cheapest 2027 Silver plan in Las Vegas, paid or reimbursed by the company.
3. Payroll adds it$5,638 a year goes into W-2 Box 1 wages, not Boxes 3 and 5.
4. Form 7206The deduction is worked out there, capped at your Medicare wages.
5. Schedule 1Line 17: the $5,638 comes back off your income.

A more-than-2% shareholder is treated like a partner for fringe benefits, so the premiums cannot be a tax-free benefit the way they are for staff. IRS Notice 2008-1 is the route around that: wages for income tax, left out of Social Security and Medicare wages, then deducted under section 162(l).

The Cap Most Owners Miss

The deduction cannot be more than your earned income from the S corporation, which for a more-than-2% shareholder means wages as defined for Social Security and Medicare tax (section 162(l)(5)), Box 5 of the W-2. The premiums are in Box 1 but not Box 5, so they never raise the cap, and an owner who takes no salary gets no deduction at all. For the Las Vegas plan above, a salary of $5,638 or more keeps every dollar deductible.

Three More Rules

• The spouse ruleNo deduction for any month you could join a subsidized employer plan, yours or your spouse’s, even if you did not enroll.
• Family countsYour spouse, dependents and any child under 27 at year end are covered; a Nevada family of four’s typical lowest-cost Silver plan is $1,502 a month, $18,026 a year to deduct. A spouse, child, grandchild or parent of the owner counts as a 2% shareholder too.
• Marketplace creditOnly the premium you pay after any premium tax credit is deductible. Above $63,840 of income for one person there is no 2027 credit, so the full premium counts.

What It Is Worth in Nevada for 2027

Nevada has no personal income tax: the state constitution says no income tax shall be levied on the wages or personal income of natural persons (Article 10, Section 1), so the saving is federal. Nevada runs its own marketplace, Nevada Health Link, so the federal plan file behind the other states’ numbers on this site does not cover it. The prices here are Anthem’s 2027 rates by rating area, including the Battle Born State Plans it sells; other insurers can come in lower. Above $63,840 of household income for one person ($132,000 for a family of four) there is no premium tax credit, so the deduction carries the full saving.

What It Saves Across Nevada

Nevada Taxes Payroll, Not Profit

Nevada’s business tax that touches an S corporation is the Modified Business Tax: 1.17% of the wages a general business pays each quarter above $50,000, figured on gross wages less the employee health care benefits the employer pays. An owner-run company paying $50,000 or less in wages a quarter owes none, and when it covers employees’ health insurance, those premiums come off the base first.

The separate Commerce Tax reaches only businesses with more than $4 million of Nevada gross revenue.

Sole proprietor, partner or C corporation owner instead? The rules differ: see the self-employed health insurance deduction in Nevada and how each kind of business handles owner health insurance. With staff in Nevada, see S corp owners in Nevada and ICHRA for small businesses.

Before the year closes: the year-end checklist, every date in order. Tax professionals with Nevada clients: a printable one-page Nevada handout.

Common Questions

Can an S corp owner deduct health insurance in Nevada?

Yes, if you own more than 2% and the S corporation pays or reimburses the premiums and reports them in Box 1 of your W-2. You deduct them on Form 7206 and Schedule 1, line 17. Nevada has no state income tax, so the saving is federal.

What if I paid the premiums from my personal account?

Have the S corporation reimburse you and add the amount to your W-2 before it is issued. A policy you pay yourself with no payment or reimbursement by the company gets no deduction; in Las Vegas that is $5,638 a year on the cheapest Silver plan for a 40-year-old.

Does Nevada’s Modified Business Tax apply to S corp health insurance?

The Modified Business Tax is 1.17% of a general business’s quarterly wages above $50,000, figured after subtracting the employee health care benefits the employer pays. A company with $50,000 or less of wages in a quarter owes none.

Sources

• IRS, Instructions for Form 7206 (2025)
• IRS, Notice 2008-1 (2-percent S corporation shareholders)
• 26 U.S. Code section 162(l)
• IRS, Publication 974 (premium tax credit)
• Nevada Constitution, Article 10, Section 1
• CMS, Plan Year 2027 Qualified Health Plan Landscape file
• HHS, 2026 poverty guidelines (2027 coverage)
• Social Security Administration, 2027 fact sheet (wage base)
• Nevada Department of Taxation, Modified Business Tax
• Nevada Department of Taxation, Commerce Tax
• Anthem Blue Cross and Blue Shield, 2027 individual rates by Nevada rating area (quoted October 2026)