Does Quickbooks Online Payroll support HSA contribution for S-Corp employee who is shareholder of more than 2% of S-Corp?

Thank you for your response. As per IRS, HSA Contribution for >2% shareholder of S-Corp must be included in federal/state wages and reported in W-2 box 1 but not in box 3 &5. As a result, this contribution will be taxable for federal/state income tax but exempted from Payroll taxes (SS/FICA/Medicare).

Also, HSA contribution for >2% shareholder of S-Corp should be reported in box 14 in W-2 and NOT in box 12 so selecting Pay Type  'Company HSA Contribution' does not provide expected result.

In QBO, I do not see any 'Pay Type' that can help us to record HSA contribution for >2% shareholder of S-Corp correctly to meet IRS requirements.

Any help will be greatly appreciated.

Good day, ialam.

For now, I'd suggest reaching out to your tax adviser on you can record the Company HSA contribution in the software since QuickBooks Online Payroll doesn't support this.

In the meantime, I recommend visiting our Blog site. This is where we share recent happenings and future developments, such as updates to newly added features.

Just in case, I'll add these articles for future reference:

• Set up and record S-Corp health insurance.
• Supported pay types and deductions explained.

Please let me know in the comment if you have any other issues or concerns, and I'll get back to you as quick as possible. I'm always here to help. Have a great weekend!

Thank you again for your response. Sincerely appreciate it.

Any contribution under  Pay Type 'Other Earning Type' will be subject to Federal/State and Payroll Tax withhold. Whereas, as per IRS guideline, HSA Contribution for 2% or more shareholder of S-Corp should only be subject to federal/state tax withhold and NOT Payroll taxes (SS/FICA/Medicare). So adding a Pay Type under 'Other Parking Type' will not address the IRS reporting requirement.

We would need HSA contribution  W-2 reporting very similar to S-Corp Owners Health Insurance where S-Corp Owners Health Insurance is subject to only Federal/State Income Tax withhold and exempted from Payroll Taxes. Also, it's reported correctly on W-2 box 14. We would need the same for HSA Contribution for S-Corp Owners.

Hello ialam,

I can see that you're posting on multiple threads. Please continue replying here if you have other questions: https://quickbooks.intuit.com/community/Employees-and-payroll/In-QBO-how-to-add-HSA-contribution-of-....

Thanks.

@JasroV Here is yet another QB Support agent (@Rose-A) who is doling out incorrect information regarding QB's treatment of HSA contributions made by >2% shareholders of S corporations. Please do something about this erroneous information being spread throughout the QB community. The OP was asking about how S Corporations enter HSA contributions in QB payroll, and @Rose-A answer is wrong. 

Again, in the thread below, @KarenEdithL is correct in that QB DOES NOT support HSA contributions made by S corporations:

https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-in-qbo-how-to-add-hsa-con...