S-Corporations:
Business Deductibility of Partnership-Paid Premiums
For employees of a Sub-S Corporations, premiums paid by the employer are generally excluded from the employee's gross income.
Owner/shareholders in a Sub-S Corporation with more than 25 ownership are not treated as employees for the purposes of LTC insurance. The premiums paid by the Sub-S Corporation must be included in the shareholder's gross income. Owner/shareholders of Sub-S Corporations follow the same guidelines for deductions as Self-Employed individuals.