Compared to regularly-taxed or C corporations, S corporations are treated differently and, in general, less advantageously when it comes to employee benefits.1 Employee benefits of any person owning more than two-percent of the stock of as S corporation are treated in the same manner as partners are treated in a partnership.2 That provision applies to the exclusion from income of amounts paid for accident and health plans, the exclusion from income of amounts paid by an employer to an accident and health plan, the exclusion for the cost of group term life insurance up to $50,000 of coverage on an employee’s life and the exclusion from income of meals and lodging furnished for the convenience of the employer.3 These are significant items in many farm and ranch corporations.



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