Health Insurance reimbursement

rjlmccann · ‎January 27, 2021

I recently gained a new client that reimburses only one employee's health insurance premium (less than $2.5k for the year). The employee selected this health insurance independently of the company, pays the premium & then furnishes receipt of payment and is reimbursed the cost of the premium in his paycheck.

Q1: Is this taxable income? Q2: Is this reported separately in some way on the W2? None of the Box 12 codes seems to apply for this situation. Q3: Is it deducted from SS & Medicare wages?

I believe it is taxable income but not included as part of SS & Medicare wages... ???

Jovychris_A · ‎January 27, 2021

Hi there, @rjlmccann.

I appreciate the details a lot. I'll help you answer these questions.

In Q1: Yes, you're correct that this is a taxable income. Q2: Yes, it separately populates Box 14: Other in W-2, and it won't apply (won't show up in W-2) in Box 12 since its basis is on the items used in paychecks. Q3: Yes, that it is deducted from SS & Medicare wages.

You can check these articles for more insights on how QuickBook populates W2 and supported pay types and deductions impacts federal taxes and forms:

Also, I encourage you to consult an accountant for professional advice on accounting taxes.

Let me know if you need assistance with QuickBooks. I'll keep my notifications open. Stay safe and well, rjlmccann!

View solution in original post

Jovychris_A · ‎January 27, 2021

Hi there, @rjlmccann.

I appreciate the details a lot. I'll help you answer these questions.

In Q1: Yes, you're correct that this is a taxable income. Q2: Yes, it separately populates Box 14: Other in W-2, and it won't apply (won't show up in W-2) in Box 12 since its basis is on the items used in paychecks. Q3: Yes, that it is deducted from SS & Medicare wages.

You can check these articles for more insights on how QuickBook populates W2 and supported pay types and deductions impacts federal taxes and forms:

Also, I encourage you to consult an accountant for professional advice on accounting taxes.

Let me know if you need assistance with QuickBooks. I'll keep my notifications open. Stay safe and well, rjlmccann!

View solution in original post

rjlmccann · ‎January 27, 2021

Thank you so much Jovychris_A! So the premium is included in Box 1, not in Boxes 3 & 5 and called out separately in Box 14; did I understand your response correctly?

katherinejoyceO · ‎January 27, 2021

Yes, @rjlmccann. You can check out the Taxability of pay types and deductions to learn more about how it affects this box.

You can also consult a tax expert or an accountant to guide you with this process.

I'm always around here to help with your QuickBooks Concerns. Take care.

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