The tax treatment of employer contributions depends on the legal structure of your organization.
For larger corporations (e.g., C-corps), employer contributions are treated as employer-provided coverage for medical expenses under an accident or health plan. Therefore, these contributions are tax-deductible for the business.
For sole proprietors, partnerships, and S-corporations, contributions made to a partner’s Health Savings Account (HSA) are handled differently:
The contribution is treated as a distribution to the partner and must be included in the partner’s income.
While these contributions may be tax-deductible by the partner (on their personal return), they are not deductible by the business.
Source: Publication 969 (2018), Health Savings Accounts and Other Tax-Favored Health Plans.
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