S-Corp Taxable Fringe Benefits Info

The following information is for ESG clients who have employees on payroll that are  2% or greater shareholders of S-Corporations.

If your accountant has advised that ESG make *corrections to your W-2 forms for employees who are 2% or greater shareholders of S-Corporations (to reflect the amount your company contributed on behalf of its shareholder employees to health insurance and other benefits), please contact ESG right away with the name of the employee(s) and the amount of taxable fringe benefits paid by the company.  Please provide this information to Lana Lund, Payroll Tax Specialist, as early as possible - but no later than December 31, 2011 (corrections must be made in the 2011 calendar year).  You can contact Lana Lund at 801-223-7007, 888-810-8187, or e-mail llund@esghr.com if you have any questions.

*Some accountants have determined that such shareholders are not entitled to receive these benefits on a tax-favored basis, despite the lack of IRS guidance with respect to S-corporations who process their payroll through a PEO.  In an effort to be responsive to concerns, ESG can make these corrections to W-2 forms – but must do so in the 2011 calendar year.