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wn1
Community Explorer **

Calculating pension deduction after FSA is deducted from wages.

 
1 Comment
QuickBooks Team

Re: Calculating pension deduction after FSA is deducted from wages.

Thanks for posting here in the Community, @wn1

 

Let's go over to your FSA payroll item setup so it will be deducted from wages before calculating pension deduction. However, I'd still suggest consulting your Health Insurance administrator to determine the appropriate tax tracking type of this item.

 

If taxable is selected, this means that wages or contribution items are fully taxed. Deduction items are exempt from tax and reduce taxable wages if Pre-tax is selected.

 

Once you've verified from your insurance provider, you can review your payroll setup and make any changes. Here's how: 

  1. Go to the Lists menu at the top. 
  2. Select Payroll Item List.
  3. Right-click on the FSA item, then choose Edit Payroll Item.EditPayrollItem1.PNG
  4. Click Next until you're on the Tax tracking type section. 
  5. Make sure to select the appropriate category, as defined in your plan documents. EditPayrollItem2.PNG
  6. Make any necessary changes. 
  7. Click Next until you can click Finish.

 

For more information about this process, you can visit this article: Edit A Payroll Item. Then, your pension item is calculated after FSA is deducted from your employee's wages. 

 

You can also check out this PDF article for more details about the Health Savings Accounts and other Tax-Flavored Health Plans: IRS Publication 969. In case you want to learn more about the benefit plans and their limits, please see this article: Benefit Plan Contribution Limits for 2019

 

This will get you in the right direction, @wn1

 

I'm here anytime you have other payroll concerns. Have an awesome day.