It is absolutely unacceptable that QB cannot recognize HSA contributions made by S Corporations.

Thank you for sharing your thoughts, @LAC1.

I’ll be sure to take note of your feedback to improve the services we have in QuickBooks Online.

It will be also be best to consult a tax adviser on how to account this manually to your account. For now, you can visit the QuickBooks Blog to check for new updates and features that we have. 

Stay in touch if you have other concerns by leaving a comment below. I'm always glad to help in any way I can. Have a great rest of the day.

@MJoy_D You’re giving erroneous advice. If an S Corp treats an HSA like a deduction, it will be excluded from taxable income (Box 1)   

Read the thread below where your own QB Support colleague, @KarenEdithL states that QB currently does not support HSA contributions by S Corps:

https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-in-qbo-how-to-add-hsa-con...

@MJoy_D You should consider retracting your incorrect advice regarding the treatment of HSA contributions in QB made by S corporations. Your colleague, @KarenEdithL is correct when she says QB doesn't support HSA contributions made by S corporations.

If S corporations were to follow your advice, the HSA contribution will not be added to Box 1 (and Box 16 in some states) which will mean taxable income is underreported.  

I still find it unacceptable that QB fails to support HSA contributions made by S corporations. 

From IRS Publication 969

Thanks for the clarification and the screenshots, @LAC1.

My colleague MaryJoyD has already updated her response.

I'll submit this feature request to our support team so they'll consider adding this in the future updates. Letting us know what best works for you will show our developers what they need to consider in the future.

You can visit our QuickBooks Blog page to know the latest news and releases in QuickBooks Online (QBO).

Let us know if you have other concerns by leaving a comment below. We're always around to help.

Has this issue been fixed in QB yet? We have a S Corp and Premium Only Plan so H.S.A. contributions should be pre-tax for us.  It is SOOOO frustrating to change this every pay period and QB tries to "catch-up/correct" the SS/Medicare withholding.  

Any ideas on how to better deal with this? 

Hello, @Wilka.
 

Thank you for taking a moment to share your concern with us. I fully understand how critical to be compliant with the tax regulations. I'm here to guide you in setting up pretax HSA in QuickBooks Online Payroll. This way, you don't have to take extra steps when running payroll.

Here's how:

1. Go to Payroll, then Employees.
2. Select your employee.
3. From Deductions & contributions, choose Start or Edit.
4. Select + Add deduction/contribution.
5. From the dropdown menu, select:
   • Deduction/contribution type: HSA plans
   • Type: Pretax HSA
     
6. Enter a description.
7. Choose how you'd like to deduct the plan: Flat amount or percentage of gross. Then, enter the amount or percentage.
8. Add an annual maximum amount.
9. When finished, click Save and Done.

We also have an awesome write-up that provides more information about this. Check out this link: Set up Health Savings Account (HSA) plans.

I'll be happy to know how these steps help you. I'm always here if you need further assistance. Have a wonderful day, @Wilka!