Health Savings Account Contributions for Shareholders

If your Company has a HSA plan, contributions to an HSA account under a cafeteria plan on behalf of a 2% or greater shareholder are not eligible to be tax free contributions by the Company. The Company would need to report the amounts contributed as either shareholder distributions (as long as distributions remained pro-rata) or as additional compensation to the shareholder. The amount would be deducted by the shareholder, as if they had made the contribution personally, on their individual tax return.