Is a S-Corp Shareholder eligible for Dep. Care Reimbursement in a Section125 plan?

[Guest rdhfn]

My main question is whether or not a S-Corp Shareholder" is eligible to participate in the Dep. Care Reimbursement portion of a section 125 plan? We have two different opinions on this from two TPAs. One says that a shareholder is allowed to participate in a dependent care reimbursement program with pre-tax dollars (definitely "no" on the medical reimbursement portion). The other TPA says they are excluded from all of section 125 plan benefits.

Anyone have wisdom to offer on this and sources?

Thanks

RDHFN

[Guest b2kates]

I do not have my IRS code with me, but why not have the corp give it to them outside the 125. There is a 3/1 discrimination test under 129 plans for NHCE vs. HCE.

[Guest kwong98]

According to the EBIA (Employee Benefits Institute of America) "A more than 2% shareholder in a Subchapter S corporation cannot participate in a cafeteria plan."