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Frequent Explorer **
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S-Corp 2% Health Insurance

How do I correctly set up Health Insurance Premium Payments for a 2% Shareholder? This company doesn’t pay a set amount every month. Sometimes they pay double or triple, then don’t pay for months at a time. I was on the phone today for over an hour with “support” and I did not get it solved. He set up accounts and made YTD entries also. They are not correct, I need to know how to delete them. 

Best answer 01-04-2019

Accepted Solutions
Established Community Backer ***

Re: S-Corp 2% Health Insurance

Please note that these articles often do Not properly differentiate between Shareholder-Employee, Officer, and ">=2% shareholder-employee" for purposes of Doing this right.

 

Look here: https://community.intuit.com/articles/1764524-how-to-set-up-s-corporation-medical-payroll-items

 

When you set up the new payroll item, read the box that explains which forms, boxes, taxes, etc, are affected, to confirm you are using the right function to meet your specific needs.

17 Comments
QuickBooks Team

Re: S-Corp 2% Health Insurance

Hi there, Kim. 

 

We have a guide article that talks about setting up S-Corp Medical health premiums in QuickBooks Desktop. You might also need to manually change the amount every time the company pays for the premium. Here's the link: https://community.intuit.com/articles/1762809.

 

With regards to deleting the YTD entry, please refer to the steps provided on the other question you submitted. Let me link you to this thread: https://quickbooks.intuit.com/community/Employees-and-payroll/YTD-Payroll-Entry/m-p/216114.

 

Feel free to visit us again in the Community if you have follow-up questions. 

Established Community Backer ***

Re: S-Corp 2% Health Insurance

Please note that these articles often do Not properly differentiate between Shareholder-Employee, Officer, and ">=2% shareholder-employee" for purposes of Doing this right.

 

Look here: https://community.intuit.com/articles/1764524-how-to-set-up-s-corporation-medical-payroll-items

 

When you set up the new payroll item, read the box that explains which forms, boxes, taxes, etc, are affected, to confirm you are using the right function to meet your specific needs.

Frequent Explorer **

Re: S-Corp 2% Health Insurance

Ok ay I’m just not getting this. It should be simple. I’ve read the articles and have gone through the steps. I’ve called support. Are there any more resources available?

Established Community Backer ***

Re: S-Corp 2% Health Insurance

"Are there any more resources available?'

 

It's best to review the data flow with your own CPA. That way, you can then review if what you set up in QB will do what you need, report where it needs to report, such as W2 Box whatever code whatever, taxability, etc, to meet your needs.

Frequent Explorer **

Re: S-Corp 2% Health Insurance

Is there a way to print a sample w-2 to make sure I have this setup correctly?

Established Community Backer ***

Re: S-Corp 2% Health Insurance

Yes, you can print and preview anything.

Experienced Member

Re: S-Corp 2% Health Insurance

I understand how to set up QB for S-Corp officers, but the support team could not find a way to set up multiple entries for S-Corp Medical because we pay 3 separate companies (some out of checking and some with credit cards) for health, dental and vision policies. How can I set these up so that the payroll liabilities correctly post to each different payment account?

QuickBooks Team

Re: S-Corp 2% Health Insurance

Thank you for joining this thread, Alexandrath.

 

Allow me to step in and share some insights about setting up S-Corp 2% for multiple entries.

 

You can create different payroll items (health, dental and vision) to post them to separate payment accounts. Here's how:

  1. Click Lists.
  2. Choose Payroll Item List.
  3. Right-click on your mouse and choose New.
  4. Choose EZ Setup, click Next.
  5. Select Insurance Benefits, click Next.
  6. Select S Corp Medical, click Next.
  7. On the Add New window, select the insurances.
  8. Click Next and set up the account correctly.

 

After adding them, you will be prompted back on the Payroll Item list window. Edit the payroll item once more, so you can select the desired account:

  1. Double-click the account.
  2. Click Next.
  3. On the Agency for company-paid liability window, select the appropriate account.
  4. Continue the prompts. 

 

For more insights, please refer to this article: How to set up S-corporation medical payroll items.

 

That should get you on the right track, Alexandrath.

 

Keep me posted if you have other payroll question. I'm still here to help you further. Have a wonderful day ahead.

Experienced Member

Re: S-Corp 2% Health Insurance

Thanks but it just crashes over and over. I have had payroll for a long time, and I already have an S-corp medical item on payroll, but this is the first time we have added the vision and dental. So now what should I do? Each time it tries to set up payroll - would this not work if I don't have the payroll service at present?

QuickBooks Team

Re: S-Corp 2% Health Insurance

Hello there, Alexandrath. 

 

I'm here to lend a hand with creating the payroll item in QuickBooks Desktop.

 

If you have inactive payroll subscription at present, you can remove the service key and change the payroll feature to Manual.

 

Here's how:

 

  1. Click the Employees tab at the top menu bar.
  2. Select My Payroll Service.
  3. Click Manage Service Key.
  4. Click Remove.
  5. Click Yes.
  6. Click OK.
  7. Click the Edit tab at the top menu bar and select Preferences.
  8. Go to Payroll & Employees.
  9. Go to the Company Preferences tab.
  10. Below QuickBooks Desktop Payroll Features, select No payroll and click OK.

Once done, let's activate manual payroll by following these steps:

 

  1. Click the Help tab at the top menu bar.
  2. Select QuickBooks Desktop Help.
  3. In the search bar, type in Manual and hit the Enter key.
  4. Below Answers in Help, click Process payroll manually (see screenshot below).
  5. Click the manual payroll calculations hyperlink.
  6. Click Set my company file to use manual calculations.
  7. Click X to close the window.
  8. Click OK.

 

If you have an active payroll subscription and encounter any unexpected closing, I'm adding an article I recommend for you to follow:

 

Solutions for when QuickBooks stops working.

 

Please be sure to let me know if you need further assistance, and I'll be more than happy to get back to you.

Established Community Backer ***

Re: S-Corp 2% Health Insurance

@Alexandrath

 

For this, you keep setting up more of the Same payroll item type, payable to different Vendor Names: "but the support team could not find a way to set up multiple entries for S-Corp Medical because we pay 3 separate companies"

 

This part is your own Pay Liability process, not controlled or controlling the payroll item: "(some out of checking and some with credit cards) for health, dental and vision policies. How can I set these up so that the payroll liabilities correctly post to each different payment account?"

 

They don't post to the Payment Account. A Person will initiate the Pay Liabilities, when you are ready to make the payment. The Tax and other Liabilities are in the Liability account, and they are there by Payroll Item. Examples:

Select to Pay Dental, to that vendor name, from Checking.

Select to pay Health, and on the Liability check being created, click on the Expenses tab and enter the same total here as Negative and post to your credit card Type of account in QB. Hit Recalculate; you just shows the Payroll system you paid the specific Payroll liability Item and amount for that Period, the Check is a $0, and the Amount just transferred to your CC account balance in this QB File.

 

You don't need a tax table, to use your own Calculating items with the file set to Manual Payroll. You won't see the Pay Liabilities screen listing what needs to be paid. You need to use Create Custom Liability Payments, in this case.

jvo
Community Explorer **

Re: S-Corp 2% Health Insurance

How do you make sure the 941s will equal w-2s at year end? Or is that important

941 Line 2 federal wages to W-2 federal wages, etc.?

QuickBooks Team

Re: S-Corp 2% Health Insurance

Hello, jvo.

 

941 wages is different from W2 wages. This is because W2 only covers wages for a certain employee while 941 reports wages for all of your employees. Though, if you’re referring to W3, then its wages should match with 941 wages.

The following articles might be able to give you more information about these tax forms:

Please visit us again if you have other questions with QuickBooks.

jvo
Community Explorer **

Re: S-Corp 2% Health Insurance

Now that I have worked thru the quick books process it actually makes sense. QB is going to withhold Fit and Sit , but not SSA w/h and Medicare w/h. You can adjust the Fit and Sit to zero or use numbers the QB payroll process computes if you combined with other wages. Not sure if they should be grossed up for withholding?

Established Community Backer ***

Re: S-Corp 2% Health Insurance

No, you would not do this: "Not sure if they should be grossed up for withholding?"

 

You report that taxable amount as what it is. That is its Gross, already. There is no further Gross Up.

jvo
Community Explorer **

Re: S-Corp 2% Health Insurance

QB is trying to withhold taxes for FIT and SIT?

But I was trying to add it to another paycheck. Maybe I should just do the S Corp 2 % Health Insurance as a separate item once a month?

Established Community Backer ***

Re: S-Corp 2% Health Insurance

If the Company already paid, you are describing a taxable fringe benefit. You would list this on a Paycheck that has Gross Pay on it, for there to be something from which the Income Tax deduction can be deducted. You cannot put it By Itself, unless you are explaining a reimbursement entry. If the company paid it, already, there is no putting this By Itself. If this is a Reimbursment process, they have this as a Taxable Gross, and they take home Less, because the income tax withholding is deducted.

 

2% shareholder health insurance

If you provide health insurance to employees who own more than 2% of stock in your S Corp, the premiums are tax deductible for your company. And, the premium amounts are taxable for your employees.

You must include the amount of the S Corp shareholder health insurance premium in the employee’s taxable wages.

So, what is the 2% shareholder health insurance taxability? Contributions made to a shareholder-employee’s health benefits plan are subject to state and fed income tax withholding. However, these contributions are not subject to Social Security and Medicare taxes and are reported as exempt for FUTA.