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houston-admin
Level 1

How to reverse HSA pretax contributions made in error

We were supposed to stop the HSA pretax contributions for an employee effective Jan 1, but failed to do so. Therefore, we now need to reverse the HSA contributions and add the amount back to the employee as taxable income. How do we do this?

3 Comments 3
JessT
Moderator

How to reverse HSA pretax contributions made in error

Hello houston-admin,

 

If this is the last paycheck and it's not a direct deposit payroll, you can delete it. Please be sure to print or save a copy of the paystub before you do so. Then, disable to HSA item by choosing None in the Amount field, so it won't deduct on the next paychecks. After that, recreate the paycheck.

 

You can take note of the difference on the net pay, and personally reimburse your employee.

 

Delete the amount from the paycheck:

  1. Go to Workers and select Employees.
  2. Click the name of the employee and click on Paycheck list.
  3. Click the net pay of the latest paycheck.
  4. Click on Edit at the bottom.
  5. Expand the Employee Deductions section and remove the HSA amount.
  6. Click OK.

If it was processed using direct deposit, please call our phone support for corrections.

 

Please let us know if you need anything else.

kate2021
Level 1

How to reverse HSA pretax contributions made in error

What if this is done all year? Can't you make a reversal?

Charies_M
Moderator

How to reverse HSA pretax contributions made in error

Thanks for hopping in this thread, kate2021.

 

The answer to your question depends on how you process the HSA pretax contributions. You can follow JessT's suggestion which to delete and recreate the paycheck if it's a direct deposit. However, I still suggest reaching out to your accountant for expert advice on how to handle this type of situation.

 

I've got helpful articles that you can check:

For paychecks done in direct deposit, you'll need to contact our support for proper guidance in correcting it.

 

tHere's how you can reach us:

 

  1. Go to the Help menu at the upper right.
  2. Select Contact Us.
  3. Enter your concern.
  4. Click Let’s talk.
  5. Choose Get a callback
  6. Type in your contact info.
  7. Select Confirm my call.

 

The availability of support depends on which type of subscription you're using. You can check out this article for our contact information. Click on the QuickBooks Online (QBO) drop-down to see the most updated support schedule: Support hours and types.

 

Keep me posted for additional questions or other concerns. I'd be more than happy to help. Wishing you the best of luck.

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