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
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.
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?
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.
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.
Thanks for your reply GarlynGay,
I did just go through the steps to turn on Self-Service Payroll, but after all the many steps, I still don't get the pencil icon showing up anywhere that I can see next to "Pay" anywhere. See the screenshot.
I also already run payroll through Gusto and so this seems like a heck of a lot of steps to just enter an Employer HSA contribution when there's got to be an easier way.
I was thinking of adding the name of the HSA vendor to my Vendor list as they received the HSA contribution and then just need to know what sort of proper account to set up in my chart of accounts to get the transaction (which was a written check) at least out of my "for review" items and into my register so I can reconcile some bank statements.
Good to see how the self-service payroll feature is set up, but seems overkill for my purposes for now as I already use a payroll service.
Hi there, @mn8err,
I can add a bit more information about setting up an HSA contribution in QuickBooks Online.
You're on the right track with the set up, you only need a few more steps to get things done. When you click the employee name, you will see the pencil icon beside the Pay section. Click on the Edit employee button, if you don't see this option. Please see the screenshot below:
Next, follow the steps below to complete the set up:
Please let me know how the steps goes. I'll be around if you need further help with QuickBooks. Have a nice day!
Is it possible to make a one time payment using QuickBooks Payroll, and have it automatically be taken from the same bank account that processes standard payroll? Or is this just for tracking purposes? I believe the OP was asking about setting up the HSA account as a Vendor. Is this possible?
Thanks in advance.
Good day, ccolon,
You're unable to send a direct deposit for the vendor's HSA payment. QuickBooks Online is used for tracking purposes.
You can use bill pay instead to send the HSA contributions electronically.
Here's an article for reference: Company contributions to a Health Savings Account (HSA)
I'll be right here if you have additional questions.