Health Insurance deduction was not coded as Pre-Tax item.

[anc1]

For two employees the health insurance item used has been post tax but should have been the pre-tax item. Now I owe the employee for overstated taxes withheld, my tax liability should decrease and the amount withheld from the employee for health insurance need to move to a pre-tax item for 941 and W-2 reporting. I would like to correct this in the 4th quarter. Can any one tell how to do this. I know how much needs to be reimbursed to the employee and what my tax liability should be.

[Anonymous · Accepted solution]

Hello anc,

I am here to help. 

Here's how to change the payroll tax tracking type:

1. Click the Lists menu and select Payroll Item List.
2. Double click the health insurance and click Next.
3. Click Next and choose the Tax Tracking Type. 
4. Click Next and click Finish.

Then let's go ahead and do the payroll checkup. QuickBooks will recalculate your payroll data. 

1. Click the Employee menu and select Payroll Setup.
2. Select Data Review.
3. Under the question "Would you like QuickBooks to help you check your payroll data?," select Yes.
4. Click Continue. 

You can try reviewing your payroll reports to see if it corrects the taxes. You'd also need to amend your previous payroll tax forms. If you have further questions, please contact our payroll support so they can provide you with different options. 

You can get our phone number on this link: https://payroll.intuit.com/support/contact/?infosrc=qs&service=16.

Thanks for reaching out to us! 

[anc1]

Can you tell me if doing this will adjust both employee and employer taxes and if so what will it do with my tax liability payment screen and if it will change the pay checks that have already been cleared?

[Anonymous]

Hello anc!
Thanks for the follow-up question.
QuickBooks Desktop will only adjust the wage base of the employee. You'd need to manually create the payroll adjustments. Here's an article to help you out: <a rel="nofollow" target="_blank" href="https://community.intuit.com/articles/1437271-adjust-payroll-liabilities">https://community.intuit.c...>.
You can contact our payroll support to help you further.

[anc1]

Thank you so much. I have had very bad payroll support sessions in the last few days. I was even been told to make an adjustment to Worker Compensation since the employee needs to be reimbursed and it would be a compensation (no kidding). After several hours on the phone with payroll support, no one could understand what I needed let alone be able to help me. I thank you so very much.

[assuredhealthinc]

Dear IntuitGarlynGay, I am exactly in the same situation as the original poster. I need to make changes for all 4 quarters in 2017. The BIG question I have is "What is the Tax tracking Type" for the "Health Insurance" premiums? Apprciate your prompt reply. Thanks in advance.

[octaviopina]

i'm on the same situation,Don't know what type of tax tracking should I choose and the quickbooks keep saying "ask you accountant "I don't have one!!!That's why I pay QB.

Please somebody knows the right answer?

[AKAPCM]

Hi, were you ever able to correct your issues with the taxed health insurance, which should have been pre-taxed?  I have a similar issue, however it was an employee that over contributed to their 2019 Health Savings Account (HSA).  So the employee received pretax on the overage and should have been taxed.  The employee was paid back the overpayment from their HSA account by a third party, where the HSA account is held.   I now need to reduce what our records show as employee contribution to their HSA to match their actual account and also tax the employee.  I have gotten multiple answers from the QB community, however none seem to be the right solution.  I was told to create a payroll liability adjustment, which reduced the employees amount of contribution to HSA to actual, however, it is not taking out the required taxes for the amount the employee overpaid as HSA pretax.  I was told to change the tax tracking from pretax to taxable, but that also doesn't seem to create taxes to pay.  Do you have any thoughts or suggestions?  Should I try a payroll liability adjustment that also includes adjustments for the taxes?  I tried to back out the HSA on the payroll  check, but QB is not letting me put in a positive number.  Did you set up a second payroll item?  It would seem if I did that that I would have one account that was over the HSA limit and another account that was the opposite.  How will these two accounts show up on a W2.  Again, if you have any suggestions, I would greatly appreciate it.  Thank you.

[Anonymous]

Hi there, @AKAPCM,

Welcome and thanks for joining the discussion. I want to make sure you're able to complete your payroll tax corrections.

I see that you've posted the same question twice, and I already added an answer to the other post. Just in case you haven't been notified of the new response, here's the link: https://quickbooks.intuit.com/community/Employees-and-payroll/An-employee-received-a-refund-from-her...

Please check the steps I've outlined for you and see if it works.

I'll be on a stand by for your response. Let me know by clicking the Reply button below. Have a good one!