Can a C Corporation Make Contributions to HSA Account for 100% Owner?

When it comes to Health Savings Accounts (HSAs), there are specific rules and regulations that dictate who can contribute to these accounts. One common question that arises is whether a C Corporation can make contributions to an HSA account for a 100% owner.

Under the IRS regulations, a C Corporation is allowed to make contributions to an HSA account for an employee, including a 100% owner, as long as certain conditions are met:

• The individual must be considered an employee of the C Corporation, receiving W-2 wages from the company.
• The contributions made by the C Corporation on behalf of the owner must be treated as additional wages subject to payroll taxes.

It is important to note that if the 100% owner is not considered an employee of the C Corporation and does not receive W-2 wages, then the corporation cannot make contributions to their HSA account. In such cases, the owner may still be eligible to make personal contributions to their HSA account if they meet the eligibility requirements set by the IRS.

Key Points to Remember:

• A C Corporation can make contributions to an HSA account for a 100% owner who is considered an employee of the company.
• Contributions made by the corporation on behalf of the owner must be treated as additional wages subject to payroll taxes.
• If the owner is not an employee of the corporation, they cannot receive HSA contributions from the company, but they may still be eligible for personal contributions.

Understanding the relationship between C Corporations and Health Savings Accounts (HSAs) can be crucial for business owners. A primary consideration is whether a C Corporation can contribute to an HSA for a 100% owner.