Discussion:C-Corp dedcutible Medical Expenses

What is required for the officer's medical expenses to be fully deductible at the corproate level. Must there be a written "plan" and who must be eligible to participate if anyone, besides the owner??

I'm not sure its always that simple. There have been court decisions that allowed for coverage of one class of employees if there was a rationale for segregating that class from other classes of employees.

One example is Bogene - Tax Court Memo 1968-147. It allowed for medical reimbursement plan for the owner but not all employees. I don't know how close the facts are to the original poster but you might want to look at some of these cases. Note the last sentence in the first heading from Bogene. There was some insurance for all employees - the boss got extra. I don't know how significant that is but you might want to read the decision.

1. INCOME EXCLUSIONS—Disability benefits—accident and health plans—what plans qualify. Medical reimbursement exclusion allowed president of corp. for medical costs reimbursed to him by employer. A plan to reimburse him and one other key management employee existed and was known to both of them. Although they were each 50% shareholders in corp., plan covered them as employees, not as shareholders. Under plan, employer corp. agreed to pay all their medical costs; payment wasn't related to stockholdings. Insured plan for other employees was in existence. Reimbursement plan for president simply provided additional medical benefits to key management employees. Congress intended discriminatory treatment of medical reimbursement plans when it enacted Sec. 105.