Before December 31: The S Corp Health Insurance Checklist

Short answer: if you own more than 2% of an S corporation, the company has to pay your 2026 health insurance premiums, or reimburse you for them, by December 31, 2026, and put them in Box 1 of your 2026 W-2, which is due February 1, 2027. Premiums you paid yourself and never ran through the company get no deduction. The self-employed have no reimbursement step, but they do have a profit cap worth checking before the year closes.

• Dec 31last day a calendar-year S corporation can pay or reimburse 2026 premiums
• Feb 12027: the day 2026 W-2s are due to you and to the Social Security Administration
• Dec 15enroll by then for a 2027 plan that starts January 1
• $63,840of income: the 2027 subsidy cliff for one person, $132,000 for a family of four

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The Dates, in Order

1. Nov 1Open enrollment for 2027 coverage opens.
2. Dec 15Last day to pick a plan that starts January 1, 2027.
3. Dec 31The S corporation has paid or reimbursed every 2026 premium, and payroll has the total.
4. Jan 15Open enrollment ends. On HealthCare.gov a plan picked from December 16 starts February 1.
5. Feb 12026 W-2s go to you and the Social Security Administration, premiums in Box 1.

The S Corp Owner’s Checklist

For a more-than-2% shareholder of a calendar-year S corporation. A spouse, child, grandchild or parent of one counts as a 2% shareholder too, so family members on the payroll follow the same list. Work down it before the last 2026 payroll.

• Add up every 2026 premium. Health coverage for you, your spouse, your dependents and any child who is under 27 at the end of the year, whether or not that child is your dependent.
• Have the company reimburse what you paid personally. Give the S corporation proof of payment, the insurer’s statements or your bank records, and have it repay you before December 31. That repayment, or the company paying the insurer directly, is what IRS Notice 2008-1 treats as a plan established by the S corporation.
• Give payroll the total before the final 2026 run. The premiums go in W-2 Box 1 as wages. When the plan meets the Social Security rule for employee health plans (section 3121(a)(2)(B)), they stay out of Boxes 3 and 5, so no Social Security or Medicare tax comes out of them.
• Check your Box 5 wages against the premiums. The deduction can’t be more than your Medicare wages from that S corporation (Form 7206, line 11). If your salary is smaller than your premiums, raise it with your tax professional before payroll closes.
• Count only the months with no employer plan. Any month you or your spouse could have joined an employer’s subsidized plan is out, even if you didn’t enroll.
• Keep the paper trail. Premium statements, proof you paid, the reimbursement record and the W-2 that shows the premiums in Box 1.
• Pick 2027 coverage by December 15. The policy can be in your name or the company’s; what counts is that the S corporation pays it or reimburses you during 2027 as well. Having the company pay it every month from January means no scramble next December.

If You Work for Yourself

Sole proprietors, single-member LLCs and other Schedule C filers claim the same deduction on Form 7206 with no company in the middle, so there is no reimbursement deadline. Three things are still worth a look in December.

• The profit capThe deduction can’t be more than your net profit from the business, less the deductible part of self-employment tax and any SEP, SIMPLE or qualified plan contributions from that business (Form 7206, lines 4 to 10). A large year-end retirement contribution in a thin year can squeeze it.
• Income tax onlyThe deduction lowers income tax, not self-employment tax, so the profit that paid the premiums still carries self-employment tax.
• Whose nameThe policy can be in your name or the business’s, so a marketplace plan in your own name qualifies. With a premium tax credit, only the part you pay yourself counts, worked out with Publication 974.

The One Item That Can Wait Until April

Health savings account contributions for 2026 can go in until April 15, 2027, the filing deadline without extensions; an extension does not stretch it. The 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage, rising to $4,500 and $9,000 for 2027. The months you contribute for need an HSA-qualified plan, and since 2026 the IRS treats Bronze marketplace plans as HSA-qualified (Notice 2026-05).

Where Your 2027 Income Lands

For 2027 coverage the premium tax credit stops at 400% of the poverty line: $63,840 of income for one person, $132,000 for a family of four. Below it, the benchmark Silver plan costs no more than 10.22% of income at the top of the scale; above it there is no credit at all, because the enhanced credits ended after 2025. The self-employed health insurance deduction lowers adjusted gross income, the starting point for the income the marketplace counts, so near the line it can decide which side you land on.

Your State’s Version

Each state guide walks through the same deduction with that state’s income tax treatment, its 2027 prices by metro and a Form 7206-style calculator.

• AlabamaS corp ownersSelf-employed
• ArkansasS corp ownersSelf-employed
• FloridaS corp ownersSelf-employed
• IndianaS corp ownersSelf-employed
• KansasS corp ownersSelf-employed
• MichiganS corp ownersSelf-employed
• MississippiS corp ownersSelf-employed
• NebraskaS corp ownersSelf-employed
• NevadaS corp ownersSelf-employed
• North CarolinaS corp ownersSelf-employed
• OhioS corp ownersSelf-employed
• OklahomaS corp ownersSelf-employed
• South CarolinaS corp ownersSelf-employed
• South DakotaS corp ownersSelf-employed
• TennesseeS corp ownersSelf-employed
• TexasS corp ownersSelf-employed
• UtahS corp ownersSelf-employed
• WisconsinS corp ownersSelf-employed

Tax professional? One-page client handouts for each of these states, with your firm’s name on them: for tax professionals. The full rules: health insurance for S corp owners and the self-employment health insurance deduction.