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lisach
Level 1

To include or not include health insurance on employeee paycheck?

I have 1 employee and 1 S-Corp owner/employee. Health Insurance is 100% paid by the company. I understand the S-Corp owner needs it as a contribution since its part of taxable gross income for withholding. But could someone tell me the impact of showing or not showing the health insurance on the paycheck for the regular employee? It doesn't affect taxable income.

 

I ask because I noticed the inherent QB problem in regards to the liability and expense account when paychecks are run (quarterly in our case) requiring the use of prior payments to fix the liability reporting and journal entries to fix the duplicate entries for Expense and Liability accounts. Health insurance is paid monthly and paychecks are cut quarterly. If I remove the company contribution from the regular employee, then I only have to fix the S-Corp owner entries.

 

What reports or forms or other back-end flows need this information for tax purposes? Other than general reports showing the contribution made by the company.

 

Any thoughts or comments greatly appreciated.

2 Comments 2
Joesem M
Moderator

To include or not include health insurance on employeee paycheck?

Hello there, @lisach.

 

Thanks for posting to the Community. Let me share some information about S-Corp for payroll.

 

As mandated by the IRS all insurance should be reported. This is to ensure your tax calculation for your regular employee is correct.

 

However, if you disagree with the default type, or are unsure how the item should affect tax forms or its taxability, I'd recommend consulting a tax professional or financial adviser. They can guide you with the set-up and provide other advice for your company.

 

Additionally, here are some IRS helpful articles that'll further guide you in defining shareholder-employee taxes:

 

 

Also, for the reports and forms, that you need for your tax purposes, just check out these articles below:

 

 

Keep me posted if you have any other concerns. Please know I’m here ready to assist further. 

lisach
Level 1

To include or not include health insurance on employeee paycheck?

Really??? This is the answer that a professional Intuit Quick Books Support engineer gives? A boilerplate referral to seek the advice of a tax professional?  Where does it look like I'm asking for tax advice?

 

This is an usability question. A question on how to circumvent Intuit Quick Books transaction posting based on Internal Programming. Internal programming code that executes when the PAYROLL ITEM of Health Insurance is a part of the paycheck, and the duplicate entries created in the accounts combined with the erroneous increase of the internal QB Payroll Liability balance.

 

 

 

 

 

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