S Corporation Owner Health Insurance Deduction

The IRS has issued Notice 2008-1 that details how an S corporation shareholder can qualify for the self-employed health insurance deduction under §162(l) even if the policy is in the name of the shareholder. The notice is at odds with the implication contained in IRS Headliner 163 issued in May of 2006 that seemed to many to strongly suggest that personal ownership of the policy was fatal to the deduction. We had previously discussed why, perhaps, that wasn't the case in a podcast back in June of 2006 that suggested listeners look at Revenue Ruling 61-146 and consider whether a similar program would not solve the problem the Headliner pointed out with individual policies. What the IRS has now done is, effectively, adopted that solution with official blessing. The materials can be downloaded from http://www.edzollars.com/2007-12-26_S_Corporation.pdf. The podcast is sponsored by Leimberg Information Services, located on the web at http://www.leimbergservices.com.