Health and accident insurance premiums paid on behalf of a greater than 2% S corporation shareholder-employee are deductions by the S corporation and reportable as:

A distribution on the shareholder-employee's Schedule K-1, reducing the shareholder's basis in the corporation.

A separately stated expense on the shareholder-employee's Schedule K-1.

Wages on the shareholder-employee's Form W-2, box 1, subject to income tax withholding.

Wages on the shareholder-employee's Form W-2, boxes 1, 3, and 5, subject to income and FICA withholding.

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