"With this being said it shows a credit in the PL for the withholding from the shareholder which is strange since I put the total gross amount of premiums on the paycheck.:

I think you are referring to the deduction? It should be seen as part of gross compensation, because it is a component of compensation. The way you described their handling of that gross portion, it might be showing as gross compensation, then credited there and offset as benefit? They're running it around a bit, in other words. The point is, the company has it as expense because they reported it as gross income for the shareholder. The difference in doing it as $15k, or splitting it as $6k and $9k, as long as the taxes were handled properly, is clarity of that as a benefit. See how hard they made it for their tax preparer and their payroll people, by splitting it?

Or, are you seeing only the gross and its credit (not gross, credit, and an offset)? In other words, the deduction would be collected as a liability, not an offset to the gross expense. Or, it is part of the gross expense, collected as contra-expense, then they pay out the full benefit as expense. You have to follow what they did to confirm they didn't either double-dip, or bypass something, in other words.

"I also do this shareholders personal return so the amount that is in box 14 it will be entered from the W-2 into Health Insurance paid"

Exactly. The full $15k should show on the W2, since it is considered paid on behalf of the shareholder and they handled it as pre-tax. The other "reimbursement" method, where the employee has a post-tax deduction, would result in the company share of $9k in box 14 (company contribution gross), but your shareholder would still be considered to have incurred the full $15k. It's that weird handling of the portion as pre-tax deduction after being included in gross compensation, that's confusing.

"so it is very strange as this is the first year payroll withholding was recorded. Something just does not feel right about this treatment."

Well, it's not right, really, but the end result is correct. The provision requires the health coverage be paid to the provider or to reimburse the employee-shareholder. The full amount the company paid to the health coverage provider is reportable as taxable income, then your shareholder takes it as an expense.

Adding it to the paycheck Gross, then deducting it pre-tax, is the right reporting. It just implies they paid it to the shareholder, then took it back. Typically, it's added to show it as a taxable benefit. Not as part of pay and then a deduction. Same difference, as long as it was handled properly and reported properly. Just convoluted. QuickBooks payroll would handle it a bit like this, in fact.