I have found clear evidence that any medical insurance paid on behalf of an S Corp shareholder must be taxed for federal purposes and included in Box 14 line 1 - "Ins." on the W-2.

However I have not found clear evidence that the same needs to be done for family members related to the shareholder for medical insurances.  I have read that family members can exclude this taxable insurance on their tax returns.  This leads me to believe this needs to be done.  Sure wish I could see clear evidence of what to do!

Any ideas?