Hi BettyJaneB,

First, what and amazingly detailed response and you provided such an interesting use of QB that I never thought about doing in the past!  But you are right, technically this is a prepayment.

I need to ask a few more questions and share some more details to fully understand how this should be done.  In this case, there is a single payment made to the insurance company of 15K.  There is also a single paycheck created for the year which is enough to pay the taxes.  Often, the check may be for a small amount like $10 after taxes but the 15K of S-Corp Medical premium is now on the paycheck and will appear on the W-2.

Therefore, there is no need to keep the prepayment account and general ledger because it is done all at once and one time.

In the past, Health insurance (always been 100% company paid) has been categorized  as account Type, "Expense" as the company did incur the cost and I want it to show on the P&L as an expense to the company.  Obviously, in this case zero amount is cover by the officer.

Then, I created an insurance benefit called "S Corp Medical Benefit Co Paid"  and Expense account type "Expense" and Liability account type "Payroll Liabilities".  I want to show on the P&L that the 15k was a payroll liability but it also was an expense because the company paid 100% for it.  I do not want the 15K to show up on the P&L as 2 expenses of 15K.

Have I done this correctly?  (Clearly I am not an accountant and you have BEEN AMAZINGLY articulate and so very helpful!)

Any advice and clarification would be so incredibly helpful for me!

You're halfway there, amoskovitz.

When you run payroll, company paid taxes will increase both Expenses and Liability accounts. You'll want to choose the Liability account when paying the insurance benefit, so it won't show up twice on the Profit & Loss report.

Just in case you want to set up a scheduled liability in QuickBooks, refer to this link: Set up and pay scheduled or custom (unscheduled) liabilities.

We're a post away if you need anything moving forward. Have a great day!

This wasn't about company paid taxes.  It is about the premiums and how they are categorized and then how that should appear on the P&L. 

Hello there, amoskovitz.

If you've followed ShiellaGraceA's instructions, the amount will show up on the Expense (P&L) and Payroll Liability (Balance Sheet) accounts when using the insurance deduction item on the paycheck.

Payroll liabilities include the money you pay your employees, the withholding you take from their paychecks, and your payroll expenses as an employer. Your portion of the insurance deduction remains a liability until you pay them to the required agency.

Let us know if you have further questions. We'll be around.

Hello - I just called QB Online support team (Case #: [removed]).  They said that there is no way to create a S-Corp check for health premiums and NOT deduct Payroll taxes (SS and Medicare).  However, federal and state taxes will not be reported on the S-corp check.

This is exact opposite of what I am trying to accomplish.  Please help.

Thanks for joining us here today, @SpencerGOld.

I have some information about how to record or S-Corp insurance in QBO. There are three ways to do this. Here are the following:

• Option 1: Employee Tax Loan
• Option 2: Lowering or zeroing out taxes
• Option 3: Company pays taxes

If you want to lower or zero out your taxes, here's how to do it.

1. Go to Workers, then Employees.
2. From the Run Payroll drop-down, choose Fringe Benefits only.
3. Tick No, my employee will pay the taxes. Then, hit Continue.
4. Change the Pay date. Select only employee(s) who need to have S-Corp recorded. In the S-Corp Ins. field, enter the dollar amount for S-Corp Premiums.
5. Tap Preview Payroll. Tick the edit (pencil) icon next to the Net Amount.
6. Take the Employee taxes drop-down. Zero out the federal income tax and state income tax.
7. Click OK to save and then Submit payroll. Then, Finish payroll.

To learn more about the options, you can check out this guide: Set up and record S-Corp health insurance.

If you need help with other payroll tasks, you can browse for specific topics here and look for responses that fit your concern.

Fill me in if you still have questions or concerns about payroll. I'll be around to help. Take care and have a wonderful rest of the week.

Our company pays 100% of our officer insurance premiums through the company.  I created the SCorpMed payroll item as a company contribution and created a year end check that was zero dollar but had this item as an addition so that it would flow through to the W2.  That worked correctly as I wanted, however the Monthly Insurance Premiums paid all year and this new S-Corp contribution are both showing as expenses on my P&L.  Do I use the method listed here by creating a "Other Current Asset" to fix this?  If so how do I point the payments made in all of 2020 to this account as those are already made.  I am very confused.  Any help would be greatly appreciated.  This has thrown off all of my numbers.  We have already filed W2s and I really do not want to do a correction so is there a way to do it without having to correct the W2?  

jennatsynergy:  HOW did you get it to let you create a zero dollar paycheck?  I followed all the instructions about creating Payroll Item "S-Corp Medical Insurance", with SCorp Pd Med Premium as the tax tracking type.  AND creating "S-Corp Adjustment" Addition payroll item, to use for creating ".01" and "-0.1" lines, along with the full amount of premiums already paid through the year as an "S-Corp Medical Insurance" item.  !BUT! it still then tells me it cannot create a paycheck with zero.

If I am ever able to create the darn paycheck record, then I'll be in the same boat you are, with double-representation on the P&L because the premium payments made through the year are already there.  But right now I just need the S-Corp Med check entry so that I can file a correct W-2 through QBDT Enhanced Payroll.

Hello there, Dawndawndawn.

You can create a paycheck to report the amount of S-Corp Medical benefits if you wish to apply it to the employee's wage base. Creating a paycheck will also matter on how you created the payroll item. 

If the plan is offered to all employees, the payroll item should be with a tax tracking type of SCorp Pd Med Premium. On the other hand, if the shareholders have a different plan from other employees, create a payroll item with fringe benefits tax tracking type. You can check out this page that will walk you through applying S Corp Medical at year-end for corporate officers.

If you have already paid the same plan offered to all of your employees and wanted to just report it on your tax forms, you can zero out the balances showing as owed, by creating a liability adjustment. For the detailed steps, click here.

Feel free to use this reference on how we populate the boxes on the IRS Form W-2.

Keep me posted if there's anything else that you need help with. Take care and have a great day!

Can you please help me?  I am using QB 2021 Pro Desktop.  I want to create a journal entry for a more than 2% shareholder as a fringe benefit for health insurance premium paid.  I have done this in my QB 2017 version, but my 2021 looks totally different and I cant figure it out.  Nor can any payroll tech support agent seem to.  I have spent countless hours on the phone with them.  This should be a common entry.  please help. 

Call me....you aren't doing it right, which is why you aren't getting an answer.  I wrote a cheat sheet to get this done annually.   [removed] Avi 

avi

I just tried to call you and got your voice mail.  I left a message with my phone number. Please call me back, nikki

AVI is the bomb.com!! Thank you so much.  Your a life saver.  You definitely came to my rescue.  

Would it be possible to get a copy of that cheat sheet? I would be so VERY grateful.

If our company does not offer insurance plans to employees, I am the only owner (100% share) with a marketplace insurance for my family under my the owner's name and using my individual funds.  Currently I guess the question would be: (1) Is a marketplace plan qualified to deduct?  (2)For any plans including off-marketplaces that the owner purchases by themselves, does the company need to pay for it or reimburseme it in order to deduct (3) If so, how to set up the payroll in Quickbooks payroll online core version ?  Is the marketplace premium subject to Medicare and Social security tax? 

Glad to see you here in the Community, wlmchem.

If you have an Obamacare plan through the Health Insurance Marketplace, you may qualify for the premium tax credit. Take note that this plan is fully taxable (Medicare and Social Security). 

Moreover, medicare isn't part of the Health Insurance Marketplace. Thus, it won't marketplace affect your Medicare choices or benefits. On the other hand, Social Security benefits are counted as income in determining eligibility for premium tax credits in the Marketplace.

You can check this link to learn the basics of setting up payroll in QuickBooks Online: Get started with QuickBooks Online Payroll. Regarding the premium, I'd recommend consulting an accounting professional in adding it to ensure that everything will be tracked accurately.

Lastly, here's an article that will guide you in adding, editing, and tracking your insurance benefit plan in QBO:

• Set up an S-corp medical payroll item for your corporate officers
• Manage payroll items for your insurance plan.

Drop me a comment below if you need additional assistance in dealing with your other payroll tasks. Have a great day!

Hi. is there any way or workaround we can add any insurance premium into w2 as fully taxable fringe benefit in quickbook payroll online? I did not want to set up an insurance plan for the company in the quickbook. From here, https://quickbooks.intuit.com/learn-support/en-us/help-article/worker-benefits/set-corporation-medic...

I assume that many single member s crop is in the second option.  It says "If the 2% shareholders have a different plan from other employees or don't offer an insurance plan to employees at all, the plan is fully taxable. This type of plan is only supported in QuickBooks Desktop Payroll."

How can I add the premium as fully taxable fringe benefit using Payroll online core?

I can set everything up okay I think, but it will not let me have the total premium as a deduction.  My question is; is there a reason I cannot use a 6000.00 annual ins premiym with a gross of under $25,000.00 gross wage?

Good day, @eileenerwin.

It's possible that the amount in the limit field on the employee's name causes the problem. This is a part of your setup when setting up your S-corp medical insurance item. 

Here's how to check the amount:

1. Select Employees, then Employee Center.
2. Double-click your employee’s name.
3. Click Payroll Info.
4. In the section for Additions, Deductions, and Company Contributions, under Item Name, add your S-corp payroll item.
5. In the Amount column, review the amount per paycheck to take out. 
6. Check the total premiums for the whole year in the limit field, 
7. Select OK.

If you're still getting the same result, I suggest contacting our Payroll Support Team. They can check your payroll item setup and help you determine the possible cause of the issue. 

To help you stay on top of the year-end’s taxes and forms, I’m adding a link that can assist in preparing the payroll data: Year-end Checklist.

If you need help with other payroll tasks, you can browse for specific topics here and look for responses that fit your concern.

Fill me in if you still have questions or concerns about payroll. I'll be around to help. Take care and have an excellent rest of the week.

I, too, have to set up an SCorp for two officers (husband & wife).  They both used to be on the same policy (diff than "reg" employees).  However, now one of them is on Medicare.  How do I set up a separate SCorp account (the other one is Kaiser Permanente). Can I use same codes, but check more than one company name?

CJS-Denver

I'm here to help you set up an S-Corp account, 300763.

You can set up an S-Corp Payroll medical insurance item and make sure to report them on your tax forms. 

You also have to determine the insurance plan you offer to your shareholders. 

To create payroll item:

1. From the Lists menu choose Payroll Item List.
2. Click on the drop-down for the Payroll item, and select New.
3. Choose Custom Setup, and click on Next.
4. Select Company Contribution, then Next.
5. Enter a name, such as S-Corp Medical Insurance, and select Next.
6. Leave the fields as they are, and choose Next.
7. Click on the drop-down for Tax tracking type, and select SCorp Pd Med Premium.
8. Click on Next.
9. In the Taxes page, do not make any changes and click on Next.
10. In the Calculate based on quantity, leave the default set to Neither and click on Next.
11. In the Default rate and limit leave the fields blank, and click Finish.

I'm sharing this article for more details about the process: Set up an S-corp medical payroll item for corporate officers.

Regarding, using the same codes, I suggest consulting with your tax advisor to provide options and ensure your books are accurate.

The Community is always here to lend a hand if you have other concerns.

How do I reimburse myself for S Corp medical premium?  My wife and I are sole employees of S Corp and our Medicare premiums are withheld from our Soc Sec checks.

I tried to add it to my paycheck but could not.

Thanks for any suggestions.

Hi there, @PHoff. Let's get you through this situation so you can accomplish your tasks inside QuickBooks Desktop (QBDT).

1. Access your QuickBooks Desktop company.
2. Go to the Lists menu, and then choose Payroll item lists.
3. Click the Payroll item button below, and then press New.
4. Tick the Radio button for Custom Setup, and then click Next.
5. Choose Addition, and then press Next. Enter the name, and click Next.
6. Select the appropriate expense account and then press the Next button.
7. Choose the Tax tracking type, and then click Next.
8. Hit Next, and then select Neither. In the Default rate and limit, you can leave it as 0.00.
9. Once you're ready, click the Finish button below.

1. Access QuickBooks Desktop company.
2. Go to the Employees menu, and then select Payroll center.
3. Click Start Scheduled Payroll, and then press the Open Paycheck Detail button.
4. Below Other Payroll items section, add the one you created earlier.
5. Once done, click Save & Next.
6. Lastly, press Save & Close, and then Continue.
7. Once you're ready, select Create Paychecks.

To add up, I've got you this article to help you handle payroll items inside QBDT: Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll.

I'd also recommend checking this page to learn how you can add more details to your reports: Customize reports in QuickBooks Desktop.

Thanks for dropping, @PHoff. Know that you can always post here again if you need further assistance with this. We'll be more than happy to help you out again. Take care, and have a nice day!

My wife and I are the only employees of the S Corp.  Our Medicare premiums are withheld from our Social Security.  How do I reimburse myself from the S Corp so that the premiums show up as income and are correctly tracked as SCorp Pd Med Premium?  I tried to add the reimbursement to a regular payroll but could not.  Thank you.