How to change your employee's S-Corp owner status
It is important to accurately enter an employee-owner's 2% shareholder status because this affects how their health insurance premiums are taxed. If an employee becomes an S-Corp 2% shareholder at any time, you can update this in your employee's profile.
To make an update:
- Navigate to the People tab.
- Click on your employee's name.
- Click edit next to the Employment Details section.
- Select Yes next to 2% Shareholder.
- Please note: You'll need to contact email@example.com in order to change the designation to “No” so we can work through tax implications with you.
- Click Save.
If you have questions and your benefits are managed by Gusto, reach out to our Benefits Care team at firstname.lastname@example.org. If your benefits are managed externally and you have questions about the payroll implications of your S-Corp status, reach out to our Payroll Care team at email@example.com.