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I started an S corp this year. I'm the only owner and only employee. I bought insurance via the marketplace under my name and the company reimbursed me. I underestimated my income when I signed up on the Marketplace. I now have to pay back the excess premium tax credit, capped at $1250.

Because I am a more than 2% owner of an S Corp, I need to include healthcare premiums in my W2. Can I include the $1250? Does it make a difference if the S corp is cash basis? Technically I did not pay the 1250 in 2015, plus I need to file an expense report for reimbursement. Does that mean the $1250 should be claimed next year? I haven't found any official guidance on this, which surprises me as I'd imagine quite a few self employed individuals find themselves in this situation.

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Can Employers Reimburse Employees for Individual Coverage? suggests that that arrangement may have legal issues. Official guidance.

If you can't legally purchase health insurance that way, then I think that the rest of your questions are moot. The S-corp should not be paying any health insurance premiums, so they do not need to be included on the W2. Specifically, you can't include the $1250.

You may have to pay back the insurance premium reimbursements to the company. Of course, as the sole owner that would come back to you as income. You may have to pay taxes on that income.

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