An employee with a 2% or greater share in an S-Corp or a C-corp or LLC that is taxed as an S-Corp is entitled to health insurance benefits but must pay the taxes applicable to the employer's contribution toward the premium.
To learn more about tax collection and how employees with 2% shareholder status are taxed in PayWow, click here.
Here's how to change an employee's status to 2% shareholder:
- Go to Directory >> Employee.
- Select an employee for whom the status needs to be changed.
- Click the View Compensation History icon under Compensation Details and click the edit icon.
- Select Yes for 2% Shareholder.
- Click Save.