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Level 3

Set Up Pretax Aflac 100% Paid By Employee

How do I set up a PRETAX Aflac deduction paid 100% by the employee.  Thank you!

Solved
Best answer December 03, 2019

Best Answers
Highlighted
QuickBooks Team

Set Up Pretax Aflac 100% Paid By Employee

AFLAC is a supplemental insurance, Mermaidgurl. Let me guide you with setting it up.

 

First, let's create the item. Here's how:

  1. Click Lists, then go to Payroll Item List.
  2. Click Payroll Item, then select New.
  3. Select Custom Setup, then click Next.
  4. Select Deduction, then click Next.
  5. Enter a desired name, then click Next.
  6. Enter the agency name, select the liability account, then click Next.
  7. Select the tax tracking type, then click Next.
  8. Click Next on the Taxes page.
  9. Select Neither on the Calculate based on quantity page, then click Next.
  10. Select gross pay, then click Next.
  11. Enter the rate and limit, then click Finish.

Next, let's add it in the employee's profile. This way, the item will show when you create the paycheck. Here's how:

  1. Click Employees, then go to Employee Center.
  2. Double-click the employee name to open their profile.
  3. Go to the Payroll Info tab.
  4. Under Additions, Deductions and Company Contributions, add the AFLAC item.
  5. Enter the amount.
  6. Click OK

I'll add screenshots to better guide you.

 

 

 

 

I'll include an article about setting up a payroll item for an insurance for future reference. 

 

If there's something else that I can do for you, please tag me. I'll get back to you as soon as I can. 

View solution in original post

6 Comments 6
Highlighted
QuickBooks Team

Set Up Pretax Aflac 100% Paid By Employee

AFLAC is a supplemental insurance, Mermaidgurl. Let me guide you with setting it up.

 

First, let's create the item. Here's how:

  1. Click Lists, then go to Payroll Item List.
  2. Click Payroll Item, then select New.
  3. Select Custom Setup, then click Next.
  4. Select Deduction, then click Next.
  5. Enter a desired name, then click Next.
  6. Enter the agency name, select the liability account, then click Next.
  7. Select the tax tracking type, then click Next.
  8. Click Next on the Taxes page.
  9. Select Neither on the Calculate based on quantity page, then click Next.
  10. Select gross pay, then click Next.
  11. Enter the rate and limit, then click Finish.

Next, let's add it in the employee's profile. This way, the item will show when you create the paycheck. Here's how:

  1. Click Employees, then go to Employee Center.
  2. Double-click the employee name to open their profile.
  3. Go to the Payroll Info tab.
  4. Under Additions, Deductions and Company Contributions, add the AFLAC item.
  5. Enter the amount.
  6. Click OK

I'll add screenshots to better guide you.

 

 

 

 

I'll include an article about setting up a payroll item for an insurance for future reference. 

 

If there's something else that I can do for you, please tag me. I'll get back to you as soon as I can. 

View solution in original post

Highlighted
Level 2

Set Up Pretax Aflac 100% Paid By Employee

Hi,

 

Can you tell me what tax tracking type you chose?

Step #7. That's the most crucial part of setting up. 

 

Thank you.

Highlighted
Moderator

Set Up Pretax Aflac 100% Paid By Employee

Hey there, @DebC-TSB. Thanks for joining the thread.

 

The Tax Tracking Type is None in most cases for deductions from post-tax health insurance and Premium Only/125 for deductions from pre-tax health insurance. To assess the taxability of the item, contact your health insurance administrator. To determine the tax tracking type for Health Savings Accounts and Flexible Spending Accounts or S Corp Medical, click the following links:

 

Please let me know if there's anything else I can do to be of assistance.

Highlighted
Level 2

Set Up Pretax Aflac 100% Paid By Employee

Hi Michael,

 

Thanks for the feedback. After a few trial and errors, and creating dummy W2s, I found a way to get the premiums out of box 14.

 

I prefer to use "Other" tax type. These deductions show up in box 12, with a clear label of what they are. Anything but a proper HSA, 125 or other Pretax payment belonging in Box 14 with a "W", imo, is not a good idea. 

There is no way to control what letter QB puts in box 14.

How I did it: For Pretax - click off all the taxes; PostTax - leave all taxes unchecked.

 

Deb Cartier

TOP SECRET Bookkeeping Inc

"Because it's nobody's business but yours!"

 

 

Highlighted
Level 1

Set Up Pretax Aflac 100% Paid By Employee

We were told that this type of insurance premium is pretax for federal, but not for the State of California. When setting this up in Quickbooks Online, if we set it up as a healthcare deduction, it assigns pretax to Federal AND state - there is no way to separate them.

 

We were told by Quickbooks last year, that the only way to get it to be pretax for federal and not state is to set it up as an HSA, which seems incorrect and creates issues/errors for employees (specifically those using Turbo Tax) when taxtime comes, because the premium is appearing in Box 12, with Code W for an HSA.

 

Can you advise on the pre-tax status for federal vs state? Are you able to post instructions/screenshots for how to set this up in Quickbooks Online?

Highlighted
QuickBooks Team

Set Up Pretax Aflac 100% Paid By Employee

Thanks for joining the thread, @calicass83.

 

There isn't a way to make the AFLAC pretax for federal and exempt on the state. Thus, we're unable to separate them in QuickBooks Online (QBO).

 

The following are the exempt health insurance in QBO:

 

  • FIT, SS.
  • Med, FUTA.

This is how they're reported on federal forms:

 

  • 941: Decreases boxes 2, 5a, 5c
  • 940: Box 4 and 4a checked
  • W-2: Decreases boxes 1, 3, 5

 

QBO calculates these taxes based on the reduced salary amount. Hence, it results in less income tax.

 

Check out the Pretax health insurance section of this article for more details about the supported pretax health insurance: Supported pay types and deductions.

 

Also, read through the Employees and payroll taxes section of this Community resources to learn more on how to manage payroll taxes: Community help articles.

 

Please let me know if you need more help with managing your payroll taxes or anything else related to QuickBooks. I'll be here to help you. Take care and have a great day.

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