Short answer: if you own more than 2% of an S corporation in Wyoming, 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 Wyoming 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.)
- $14,459a year of the lowest-cost Silver plan for a 40-year-old in the typical Wyoming county, 2027
- $2,212of Social Security and Medicare tax a Wyoming 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
- $0Wyoming income tax on you or the S corporation
How the Money Moves in Wyoming
- Buy the planAny of the 2 insurers on the Wyoming marketplace, or a private plan, in your name or the company’s.
- The S corp pays$1,121 a month for a 40-year-old’s cheapest 2027 Silver plan in Cheyenne, paid or reimbursed by the company.
- Payroll adds it$13,454 a year goes into W-2 Box 1 wages, not Boxes 3 and 5.
- Form 7206The deduction is worked out there, capped at your Medicare wages.
- Schedule 1Line 17: the $13,454 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).
Paying the premiums from your personal account and never running them through the company. The IRS’s own example in Notice 2008-1 is a shareholder who pays for a policy in their own name with no reimbursement: no plan established by the S corporation, no deduction.
In Cheyenne that mistake costs the whole $13,454 and roughly $3,229 of federal income tax at 24%. The fix has a deadline: the company pays or reimburses the premiums by December 31 and adds them to your W-2. The year-end checklist has every date in order.
Work out your deduction
Form 7206-style worksheet. An estimate, not a tax return.Presets: the typical lowest-cost Wyoming Silver plan for 2027. Line 10: Social Security tax to the $192,300 wage base, Medicare 2.9%, plus 0.9% over $200,000. Nothing you type leaves this page until you send it.
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 Cheyenne plan above, a salary of $13,454 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 Wyoming family of four’s typical lowest-cost Silver plan is $3,852 a month, $46,227 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 Wyoming for 2027
| Household | Per month | Deductible per year | Federal tax saved at 22% | At 24% |
|---|---|---|---|---|
| One adult, 40 | $1,205 | $14,459 | $3,181 | $3,470 |
| Two adults, 40, and two children | $3,852 | $46,227 | $10,170 | $11,095 |
Wyoming has no personal income tax and no corporate income tax: the Legislature’s own tax summary lists both at 0% under Article 15, Section 18 of the state constitution, so the saving is federal only. The marketplace in Wyoming has 2 insurers for 2027, a median of 29 plan options per county, and a PPO in every one of its 23 counties. 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 Wyoming
| Where | Lowest Silver, per month | Deductible per year | Federal tax saved at 24% | Payroll tax not charged |
|---|---|---|---|---|
| Cheyenne (Laramie County) | $1,121 | $13,454 | $3,229 | $2,058 |
| Casper (Natrona County) | $1,171 | $14,056 | $3,373 | $2,151 |
| Gillette (Campbell County) | $1,205 | $14,459 | $3,470 | $2,212 |
| Laramie (Albany County) | $1,205 | $14,459 | $3,470 | $2,212 |
| Rock Springs (Sweetwater County) | $1,205 | $14,459 | $3,470 | $2,212 |
Wyoming: Nothing at the State Level
Wyoming taxes neither personal nor corporate income, so there is no state return for the deduction to flow through and nothing for the S corporation to file on its income. The federal saving is the whole picture.
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Sole proprietor, partner or C corporation owner instead? The rules differ: see the self-employed health insurance deduction in Wyoming and how each kind of business handles owner health insurance. With staff in Wyoming, see S corp owners in Wyoming and ICHRA for small businesses.
Before the year closes: the year-end checklist, every date in order. Tax professionals with Wyoming clients: a printable one-page Wyoming handout.
Common Questions
Can an S corp owner deduct health insurance in Wyoming?
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. Wyoming 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 Cheyenne that is $13,454 a year on the cheapest Silver plan for a 40-year-old.
Does Wyoming tax an S corporation’s income?
No. Wyoming has no corporate income tax and no personal income tax; the Legislature’s tax summary lists both at 0% under Article 15, Section 18 of the state constitution.
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)
- Wyoming Legislature, Legislative Service Office: Wyoming tax structure, rates and collections (June 2025)
- CMS, Plan Year 2027 Qualified Health Plan Landscape file
- HHS, 2026 poverty guidelines (2027 coverage)
- Social Security Administration, 2027 fact sheet (wage base)