Question

How do you make an HSA employer contribution on QB online? And does the employer contribution need to be on the W-2?

Forum|Forum|7 years ago
January 10, 2019
3 replies
36 views

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QuickBooks Online

MichaelDL

Level 4

The Community has you covered, @ksundman.

Check out the steps below to make an HSA Employer Contribution in QB Online:

Create An HSA Employer Contribution

From QuickBooks Online, navigate to the Workers tab and the Employees section.
Click the name of the employee, then click the tiny Pencil icon ✎ next to Pay.
Under How much do you pay this employee?, click Add additional pay types or the Pencil icon ✎ depending on what you see.
Click Even more ways to pay this employee to expand the pay type list and select Company HSA Contribution.
Enter a recurring amount to contribute each payday, or leave it blank to enter the amount manually each paycheck.
Click Done.

These instructions are also available from our guide on setting up company HSA contributions here. Doing this will enable you to add the employer's contribution to your employee's HSA plan for every pay period.

Regarding your question on how this item should affect the employee's W2, the guide states that your contributions to an employee's HSA are reported in Box 12 but excluded from federal wages and most state wages. You can learn about this and the taxability of all QBO-supported pay types, deductions, and contributions in our thorough article on the matter here.

Please keep in touch with me here for all your QuickBooks needs. Thanks for coming to the Community, cheers to a successful and stress-free tax season for your business.

M

mn8err

I am trying to properly enter a $3,450 HSA employer contribution for tax year 2018 and am getting stuck on the following per the instructions already posted.

Note that I am using QuickBooks Online Simple Start, but imagine there's got to be a way to do this properly without having to upgrade as I haven't needed and don't need the additional features of the more expensive plans as I run a small S-Corp business where I'm both employer and employee.

In step 2. of the instructions where it says:

Click on the name of the employee, then click the tiny Pencil icon next to Pay, I simply don't get this option showing up anywhere in the pop up window for Employee Information (per screenshot I took of the available fields).

Can someone please let me know why this is?

Also, is there a different approach to making a HSA employer contribution in QBO Simple Start other than the method already suggested here? By creating the proper account in Chart of Accounts and mapping it to the employer/employee somehow?

Thanks!

A

Anonymous

Hello mn8err,

You can use the Payroll feature with the Simple Start version. It's an add-on service that requires you to sign up. That's why the Pencil icon is not showing up.

Here's how:

From the Workers menu, go to the Employees tab.
Click on Get started.
Select Turn on payroll.
Choose either Try Self Service Payroll or Try Full Service Payroll.
Click on Get started.
Follow the instruction on how to set up your payroll.

Please note that you can only enter prior payrolls for this year 2019. You can also click on this link to see articles that'll help you set up your payroll: https://quickbooks.intuit.com/learn-support/en-us/payroll-and-workers/07?product=QuickBooks%20Online

If you're not ready to use our Payroll Service yet, here's a reference on how to manually record payroll transactions using journal entries: Record payroll transactions manually.

We are always here to help you with anything. Please post your questions.

K

Kmtjs2001

Hello,

In the Chart of Accounts is the employer contribution to an HSA account considered a Payroll Expense? Assuming that the employee contribution is a payroll liability.

We fund HSA accounts on a Quarterly basis for our employees should those funds be considered a payroll expense?

R

Ryan_M

Moderator

Hi @Kmtjs2001,

Yes, that's correct. An employer's HSA contribution is considered a business expense by the company.

To set it up correctly, follow these steps:

Highlight the Payroll tab.
Select Employees.
From the list, click on the employee in question.
Click the Edit (pencil) icon beside Pay.
Press the Edit (pencil) icon in section 3.
Expand the section that says Even more ways to pay.
Pick Company HSA Contribution.
Hit Done.

Take a look at this article for more details: Set up Health Savings Account (HSA) plans.

I also suggest you view this article: Set up voluntary deductions in Online Payroll. It has a table of voluntary deductions available in QBO, as well as the steps to set them up.

Don't hesitate to tag me in the comments below if you have other questions about HSA contributions. I'll be more than willing to help you out.

M

MirriamM

QuickBooks Team

Welcome to the thread, @ski town.

QuickBooks Online (QBO) only allows you to set up company HSA contributions. Since it's not taxable, I recommend contacting your tax agency. They can provide more information on handling this situation.

For more information about tracking HSA contributions, check out this article: Set up a Health Savings Account (HSA) item in QuickBooks Payroll.

If you want to set up voluntary deductions in the future, check out this article for the steps: Set up, change, or delete employee-paid payroll deductions.

Feel free to comment below if you have other questions about HSA contributions in QBO. I'll get back to you as soon as I can.

S

SantaCruz617

Hello!

The Company HSA contribution is not federally taxable but it is California state taxable. How do I set that up in QB Online payroll please?

C

continea

Level 5

Welcome to the Community, SantaCruz617! The link my colleague, MirriamM shared above will assist with that. If you need additional assistance, don't hesitate to let me know.

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