Setting up ICHRA in Quickbooks Desktop with Payroll

Hi there, @AGCorp.

Allow me to show you some of the steps you need to do before tracking the Individual Coverage Health Reimbursement Arrangement (ICHRA).

Setting up the ICHRA and Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) is the same about creating pay types. However, when tracking the tax type, you'll need to contact your agency and pick the correct tax tracking type.

Here's how to create a pay type:

1. Go to the Employees menu and select Payroll Center.
2. Click on the Payroll Item button at the bottom-left part of the Payroll Center window.
3. Choose what setup method is applicable if it's either EZ Setup or Custom Setup.
4. Follow the on-screen details until it's done. Here's a glimpse of the process:

I've added this article to know more details about the QSHRA: Desktop Payroll: Qualified Small Employer Health Reimbursement Arrangements (QSEHRA).

If you have any other questions or concerns, feel free to post here anytime. Have a good one.

Hi,

Thanks for your response. The followup question I have is with regards to your comment about the tax tracking type. Quickbooks already has a QSEHRA tax tracking type. But I don't see one for ICHRA.

I am not an ALE (i.e. I have less than 50 employees), so I don't have any 1095 reporting obligations for the ICHRA offering. Given this, what should my tax tracking type be?

Thanks in advance,

AG

Thanks for getting back to us and clarifying the scenario, AGCorp.

QSEHRA and ICHRA are non-taxable payments. With that said, the steps provided in the article to create the QSEHRA payroll item should be the same when you create it for ICHRA: Desktop Payroll - Qualified Small Employer Health Reimbursement Arrangements (QSEHRA).

Though that is how we set up the payroll item in QuickBooks Desktop, we still recommend contacting your state agency or accountant. They can tell you what is the correct tax tracking type for ICHRA item that will suit your business setup.

Note that setting up the payroll items correctly is the best thing we can do in QuickBooks Desktop. This is to ensure that the calculations related to the payroll data are accurate.

Keep us posted if you have additional queries in setting up the payroll items. We'll be right here to further assist you.

Hi,

Thanks for your response. I have been told to track this as a non taxable reimbursement.

Given this, what tax tracking type should I use?

Thanks again,

AG

Can the ICHRA compatible with QuickBooks online with Payroll?

Hello there, @sandy.

Yes. ICHRA is compatible with QuickBooks Online (QBO). It's easier to set it up inside the program, and the process is as simple as how it sounds. I do believe you can accomplish your goal in no time. To get you going, these are the steps:

1. Access your QuickBooks Online company.
2. Go to the Workers tab, and then choose Employees.
3. Select the employee's name, and then click the Pencil icon beside Pay.
4. Under How much do you pay drop-down, click Reimbursement. Know that you may enter a recurring amount in the box or add it when you run payroll. Also, you can rename this pay type to "ICHRA Reimbursement" by selecting the pencil icon beside Reimbursement.
5. Once you're ready, click Done.

Moving on, when you create a paycheck for the employee, you'll see the Reimbursement Item in the Pay column. You'll want to enter the reimbursement amount to add it to the employee's paycheck. If you'd like, you can even change the amounts each month if the reimbursement isn't a fixed amount each month.

Also, once the reimbursement is added, you can assign this to another employee. After attaching the reimbursement item to all your employees, you'll want to check your accounting preference to ensure it's in the appropriate accounts. Do this if you're planning on exporting it in the future. For further details, visit this article: Reimburse your employee in QuickBooks Payroll.

In addition, I've got you this handy article to help you in modifying reports to highlight more details inside QBO: Customize reports in QuickBooks Online.

@sandy, thanks for dropping by here today. I'll be more than happy to guide you further if you need assistance with this. Stay safe, and have a nice day!

Your links do not work.

Again the link takes you to a page that says articles deleted. This is because your instructions are not correct. 

I truly appreciate you taking the time to bring this to the Community's attention, @COLAOPETER. I completely understand how crucial it is to have access to the articles provided, and I'm here to assist you in any way I can.

I am glad to be of assistance to you and I am willing to help you with any problems you may have. Could you please be more specific about who you are referring to in your response? Additionally, kindly provide me with more details on the particular issue you are encountering, so that I can provide you with an appropriate solution.

We'll wait for your reply. The Community is always available 24/7. Take care!