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I figured it out.
From section 5 in pay section of each employee, select "add new deduction", under deduction/contribution select "new contribution/deduction" again! Then under c/d type: select health insurance, type: medical insurance, enter provider or whatever you want it to say on pay stubs, select amount for employee, employer then select taxable or pre-tax and OK!
Let me help you in setting up the Section 125 cafeteria benefit plans, Sibyl.
With this plan, your employees can pay medical, dental, and vision insurance premiums with pretax paycheck deductions. You follow the steps below in setting this up:
I encourage you to visit this link to learn more about how this health insurance plan work in QuickBooks: Section 125 cafeteria plans.
Here's an article that will help in confirming an employee's wages and benefits for year-end reporting: Year-end Reports Employee wages and benefits reports.
Fill me in if you have any other concerns or further questions about deductions and contributions. The Community will always have your back.
Please share how to properly set up the "Existing Deduction" that I am to select from the contribution/deduction drop down list. FYI I do not want the information to be printed incorrectly on the W-2s. This is for a pre-tax health and medical insurance plan and NOT an HSA.
Let me walk you through in settings up your Pre-tax Health Insurance, Sibyl.
Here's how:
Once you've run payroll the insurance is deducted from the employee's gross pay before Medicare, Federal, and State taxes are calculated.
I'll be here if you need more help.
Do you mean section 4? Health Insurance is not an option in the drop down list. Please follow your own instructions to make sure it works before posting them. It's very frustrating when they are wrong.
I meant to say, did you mean section 5?
I figured it out.
From section 5 in pay section of each employee, select "add new deduction", under deduction/contribution select "new contribution/deduction" again! Then under c/d type: select health insurance, type: medical insurance, enter provider or whatever you want it to say on pay stubs, select amount for employee, employer then select taxable or pre-tax and OK!
Once this is set up, how do I get the money to the employee? I have it set up exactly as described above.
Hypothetical example: As a benefit, I (employer) want to pay $100 per paycheck towards medical as actual money in each employee's paycheck. How do I do that?
When I run payroll, under employer contributions, the $100 appears, but it is not reflected in the payment.
Hi there, @JamiePhillips.
Let me add some details on how you can include this contribution to the paycheck.
If you wanted to pay for the deduction that you incurred in each employee, using a non-taxable item will be your option.
To do this, you can update and 0 the amounts for each employee's deduction/contribution by following these steps below:
This way, it will reflect on each paycheck as an actual money.
Also, I'll add this article as your reference in adding and updating deductions and contributions for your employees: Add or edit a deduction or contribution.
For additional reference, you can learn more about setting up a retirement plan deductions and contributions.
Feel free to leave a comment below if you have more questions. I'm always here to help. Take care!
I have done all of this and it is NOT reducing the taxable portion of the premium or FSA and it is not showing up on the W-2 either
How do we set it up to reduce the taxable portion of the income and have it actually work?
Hello there, @patley.
As an insight, the supported FSA types in QuickBooks Online (QBO) are the Dependent care FSA, Medical expense FSA, and Limited-purpose FSA.
To learn more about the taxability and how they're reported on federal forms, see links under the Health Insurance section in this help article: Supported pay types and deductions explained.
Here's how to set this up in your payroll account:
1. Go to the Workers menu, and then Employees.
2. Select the employee's name.
3. Click Edit next to Pay.
4. In section 5, select + Add a new deduction or + Add deductions.
5. From the Deductions/contributions drop-down arrow, choose New deduction/contribution.
6. Choose a Deduction type and Type from the small arrow icon.
7. Enter Provider name(appears on a paycheck).
8. From the Amount per pay period icon, choose $ amount or % of gross pay and enter the $ amount or percentage. Do the same for the Company-paid contribution as applicable.
9. Select OK, then Done.
To properly track those items, it's best to consult an accountant for assistance.
For future reference, here's an article to help you learn about filing state and federal taxes in QBO: Pay and file payroll taxes and forms.
If I can be of any additional assistance regarding contributions/deductions concerns, do let me know. I'm always here to keep helping.
Does quickbooks offer a prototype sec. 125 plan for employers to use?
Are the options selecteed by checking various boxes.
Hi there, @MikeHcpa. I'm here to share insights about prototype sec. 125 plan.
Currently, QuickBooks doesn't offer a prototype sec. 125 plan for employers to use. I can see how this feature would be helpful for you and your business.
Since this isn't an option, I encourage you to submit a feedback to our Product Development Team for review when determining features to be added in updates. This can be done directly through your account by clicking the Gear icon in the top right corner, then select Feedback or by going to the following link: QuickBooks Online Feature Requests.
Also, you may visit these links to learn more about how insurance plan work and prepare your account for year end:
Know that you can always swing by if you need help with anything else. We're just a comment away. Stay safe!
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