How to pay Wage for( S-Corp 2% Self-paid, Fully Taxable Health Insurance) using Online Payroll

Thanks for reaching us and providing us with details, wlmchem1.

I'm here to share additional insight into this S-Corp Health Insurance concern.

You're correct. The plan is fully taxable if the 2% shareholders have a different plan from other employees or don't offer an insurance plan to employees at all. But only QuickBooks Desktop Payroll supports this type of plan.

In QuickBooks Online Payroll, we can only set up the S-corp item for shareholders that have the same medical plan offered to all other employees.

Here's an article for more information: Set up an S-corp medical payroll item for your corporate officers

I recommend consulting an accountant so they can give you the best option in recording S-Corp in QuickBooks Online Payroll. You can find an accountant near your place through this link: Find a Certified ProAdvisor.

Please let me know if you have follow-up questions about S-Corp. I'm always here to help. Have a great weekend!​​​​​​​

Thanks for your reply. We really hope that the Online Payroll provides more customized items like Desktop version, as intuit gradually stops to support the old desktop versions and push people to go online. 

It completely blows my mind that QuickBooks Online Payroll does not abide by IRS tax rules regarding fully taxes 2% Shareholder Insurance. We have to change payroll services because they do not, and their customer service is a joke. Hours on the phone for the 'tax rep' to not have one clue what he was doing.