Howto correctly set up SCorp Pd Med Premium pay type (the company payment of 2% Shareholder Owner health insurance premiums-reimbursement) so it is not FICA taxable?

Good morning, natasha@treasure. 

I appreciate you coming here to the Community with your question about setting up S-Corp Medical Premium. 

S corporation medical insurance is a noncash fringe benefit provided to shareholders owning 2% or more of the corporation. 

You can set up an S-Corp Medical payroll item in QuickBooks Payroll, and report them on your employees paychecks and tax forms. Review the guide below for all the details and steps to help get this squared away: 

Set up an S-Corp Medical payroll item for your corporate officers

Feel free to reach back out if you have any further questions. We're always here to help! 

I have gone through the "set up an s-corp medical payroll item for your corporate officers " article

Steps # 1 and 2 are complete

Here is where my confusion lies

Create net zero paycheck

#4 S-Corp Adjustment item. I don't see this in my payroll item dropdown. Do I set up a payroll item for this?

If so, is this an addition or company contribution? Is this tracked on tax forms

#7 Employee paid tax advance item. Do I also need to set this up in payroll items? If so what selections do I make when creating this?

Thanks

I have gone thru steps in the "set up an s-corp medical payroll item for corporate officers"

Step 1 = same medical insurance

Step 2 = QB desktop

             SCorp Pd Med Premium

             I set up company contribution (step 1) and added to employee profile (step2)

Step 3 = QB desktop

              Create zero net paycheck

               My questions are;

               (step4) Where do I find S-Corp Adjustment ? Or do I need to set up new payroll item for this. If so what settings for new payroll item?

               (step7) Same question as step 4 above

Thank you

Yes, Gdirienz. You need to create payroll items to manage your SCorp Pd Med Premium adjustment in QuickBooks Desktop Payroll. I'm happy to share how to set them up.

Since you mentioned that the S-Corp Adjustment item isn't showing in the dropdown, you have to set up new items just like what you did on your medical insurance.

You can follow the steps below:

1. Go to Payroll, then Employees.
2. Enter the payroll Item and choose Custom Setup.
3. Select Company Contributions to see your list of payroll items. Enter the S-Corp Adjustment amounting to -0.01.

4. Follow the steps on the screen and make sure to uncheck the state and federal taxes.

5. Then, press the Finish.

The same goes for the Employee Paid Tax Advance. You need to add them as a payroll item to keep track of them. You can follow the steps provided in this article: Set up an S-corp medical payroll item for your corporate officers.

Furthermore, you can ensure that all contributions and adjustments are accurately documented by running payroll reports which is essential for financial management and compliance with regulatory requirements. See this page for our guide: Create a payroll summary report in QuickBooks.

If you encounter any issues or have additional questions regarding another payroll item in QuickBooks Desktop or any aspect of payroll processing, please do not hesitate to reach out by adding your queries below.