S Corp Cafeteria Plan

hrviv

Our company recently changed status to an S Corp - my controller has read that since our owners are no longer employees they cannot participate in our cafeteria plan and receive pre-tax benefit on their deductions. Does anyone have experience with this? We also offer flexible spending account for medical which our owners currently participate. Are they now ineligible? How does this change affect the 401k plan?

SandiF

We just switched to an S Corp as well. It is true that the owners can no longer participate in any part of the Cafeteria Plan. I'm not aware of any effect on retirement plans. They don't fall under the Cafeteria plan so I don't see why they would be affected.