We have a deduction/contribution payroll item in QB Online under the category "Health Insurance". Will this contribution track to box 12 of the W-2 with the code DD?

Hi jennifer6,

The contribution will not automatically populate on box 12 with code DD in the W-2 form. You'll have to manually report the health coverage by following these steps:

1. On the left panel, click Taxes.
2. Choose Payroll Tax.
3. Under Form, click the Annual Forms link.
4. Click the W-2, Copies B,C & 2 link.
5. On the Printable Employee Copies: Form W-2 page, click the go here link next to If you're required to report Health Coverage on Form W-2.
6. Enter the total amount paid in 2018 by both the employer and the employee.
7. Click Continue.

You can also check this article for more information: Employer-Sponsored Health Coverage W-2 entry.

Please let me know if you have any additional questions. Thanks. 

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@RenjolynC wrote:

Hi jennifer6,

 

The contribution will not automatically populate on box 12 with code DD in the W-2 form. You'll have to manually report the health coverage by following these steps:

1. On the left panel, click Taxes.
2. Choose Payroll Tax.
3. Under Form, click the Annual Forms link.
4. Click the W-2, Copies B,C & 2 link.
5. On the Printable Employee Copies: Form W-2 page, click the go here link next to If you're required to report Health Coverage on Form W-2.
6. Enter the total amount paid in 2018 by both the employer and the employee.
7. Click Continue.

You can also check this article for more information: Employer-Sponsored Health Coverage W-2 entry.

 

Please let me know if you have any additional questions. Thanks. 

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I have QB Desktop.  Do I have to manually enter the health insurance contributions on the W-2, Box 12 DD?

Hello there, @NatalieC.

Allow me to join the thread and help share information on how enter health insurance contributions on the W-2 Form, box 12 with the DD code.

You may need to create a payroll item and select Health Coverage Cost for the Tax Tracking Type so that the item will be reported on the employee's Form W-2 in box 12, with the code DD.

To create an item:

1. Select Lists at the top menu bar.
2. Select Payroll Item List.
3. Click on the drop-down arrow beside Payroll Item and select New.
4. Select Custom Setup under Select setup method, then click Next.
5. Select Company Contribution under Payroll item type and click Next.
6. Enter the item name under Name used in paychecks and payroll reports, click Next.
7. Select the agency for company-paid liability, click Next.
8. Select Health Coverage Cost under Tax Tracking Type.
9. Click Next until you'll reach Finish.

Next, create a payroll and add the item created under Other Payroll Items.

The payroll item will now automatically reflect on box 12 in the W-2 Form with the DD code.

If you don't have the payroll item setup previously, you may need to create a liability adjustment and select the item created.

1. Go to Employees at the top menu bar.
2. Select Payroll Taxes and Liabilities.
3. Click on Adjust Payroll Liabilities.
4. Add the date.
5. Select Employee and add the name of your employee.
6. Add the item created with the amount under Item Name in the Taxes and Liabilities window.
7. Click OK.

That would do it. Let us know if you have any other questions by adding a comment below, we're always here to help. Have a great day ahead!

How do I get box 12 dd on W3 from W2 for health ins.?

Does this have to reflect on W2 box 12 - I can not get it to override

What about W-3 box 12?  How do I get total on W2 to reflect?

HELP please

Hello there, @Ladyorganizer.

Allow me to share some details on how your W3 information populates in QuickBooks.

Depending on the version of QuickBooks you’re using, there are specific steps to make sure your Employer-Sponsored Health insurance is reported accurately. 

For starters, W3 is the Transmittal of Wage and Tax Statement forms for the Social Security Administration (SSA). This serves as a summary of all the W2’s you prepared.

As mentioned by my colleague, @RenjolynC, if you’re using QuickBooks Online there would be a need for you to update your Health Coverage information manually while preparing your W2.  Once updated, it will automatically reflect on your W3.

While, if you’re using QuickBooks Desktop, you must create a payroll item for your Health Insurance coverage. Kindly follow the step-by-step instructions provided by my colleague, @Angelyn_T..

On the other hand, if you have created a payroll item for your Health Insurance and none were reflecting on your W2 Box 12 DD, let’s review how your payroll item is set up.

Here’s how to run payroll checkup.

1. Go to Employees.
2. Choose My Payroll Service.
3. Select Run Payroll Checkup.

Once checked, you can open your Payroll Summary Report and compare the data on it with what you have in your W2 form.

If there’s a need to correct only one or two paychecks, you can delete and recreate the said paycheck and create payroll adjustment for it. However, if it involves correcting all the paychecks of your employees, I’d recommend contacting our Payroll Support Team. A payroll agent would be able to further check on it via secured remote access session.

Here’s how to contact us:

1. Vendors: https://help.quickbooks.intuit.com/en_US/contact.
2. Choose your QuickBooks Product.
3. Click Payroll.
4. Choose your type of Payroll Subscription.
5. Select Payroll.
6. Click on the View Contact Info button to see the support number.

Don’t hesitate to click the Reply button if you have other questions about preparing your W2 and W3 tax forms. I’m always here to lend a hand.

 Thanks @Angelyn_T!  You saved me about 2 hours worth of work trying to fix this on my own.  

Does the employee deduction amount for health insurance still have to be manually entered on line 12 DD? In my case, the employer contribution is showing up but the employee deduction is not.

Hi @Anniemac1,

It depends on what payroll item you're using since they have designated boxes that they post to. 

For example, Taxable health insurance doesn't show up on W-2. While the Pretax health insurance decreases boxes 1, 3, and 5 on W-2. 

Additional details are in this article: Supported pay types and deductions explained.

Feel free to leave a comment below, and I'll be sure to get back to you. 

The health insurance deduction comes out pretax. Yes, the amounts are decreased on lines 1, 3 and 5 (as you stated). Also, the employer contribution is showing up on the W2 box12 DD, however the employee deduction amount is not. In the payroll item setup, the employee deduction is set up as Premium only/125. Is there a way to set up Quickbooks to include both amounts on the W2 box 12 DD, not just the employer contribution?

Hi, @Anniemac1. Thank you for joining this thread.

Individuals (employees) usually don't have to report the cost of coverage under an employer-sponsored group health plan that may be shown on their Form W-2, Wage, and Tax Statement, in Box 12, using Code DD.

The amount reported doesn't affect tax liability, as the value of the employer contribution continues to be excluded from an employee’s income and is not taxable. This reporting is for informational purposes only to show employees the value of their health care benefits.

I have a link to assist you with more understanding about the QuickBooks Desktop Payroll Employer Sponsored Health Coverage Cost on Form W2's.

Should you need any further information, please do not hesitate to hit Reply. Cheers to a safe and productive week ahead.

Hi, I also have questions that I'm hoping will be answered by the link you included but it does not work for me. Can you repost?

My question is regarding Box12 DD. I want to manually add in the amounts as they were calculated externally and it is not reportable on the W3. Code DD does not show, only lines A-D. When I attempt to change it via the drop down menu it gives me a warning and asks if I want to override it. Besides "E" which autopopulates in line A, we have nothing else reportable in box 12. 

Let me repost the link for you, Bookkeeper11. 

The support article can be accessed here: https://quickbooks.intuit.com/learn-support/en-us/insurance-and-medical-benefits/quickbooks-desktop-....

Also, scroll-down all the way to the bottom to see Code DD if you're selecting it manually through the Form W2. Then, click Yes in the pop-up window that's asking if you want to override it. 

Another way of adding it manually is through a payroll adjustment. Just make sure that you're using the correct tax tracking type for the health coverage so it will reported in the correct box with the correct code.

Sharing these articles with you for additional reference:

•  Adjust Payroll Liabilities In QuickBooks Desktop
• Year-end checklist for QuickBooks Desktop Payroll 

I'd be delighted to join the thread again in case you need more help with your tax forms. 

FROM THE IRS.GOV WEBSITE Reporting on the Form W-2

Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of the Form W-2, with Code DD to identify the amount. There is no reporting on the Form W-3 of the total of these amounts for all the employer’s employees.

In general, the amount reported should include BOTH the portion paid by the employer and the portion paid by the employee

Hi JenoP,

I also have a similar question as others in the thread. The article you linked in your post indicates that the employee pre-tax contributions for health insurance also need to be reported in W2 Box-12 DD. Given that, how do we add the employee portion to the W2? As others have indicated, the Box 12 -DD does have the employer contribution (Based on the Health Coverage Cost" tracking type).

Thanks in advance

AG

Hi AGCorp!

I'm taking care of your question since JenoP is already out of the office.

The Health Coverage Cost tax tracking type will actually show the DD code in box 12 of the employee's W-2. The other option is to override by selecting the DD code from the form itself, as explained by Jeno above. However, the first option is what we always recommend for correct reporting.

Let me know if you have additional questions about your employee's W-2 form.

Hi @JessT  - Thanks for your response. I understand your point about items tracked with the "Health Coverage Cost" showing up in the Box 12 -DD. I have used this mechanism to track the costs.

My question is that this does not seem to include the "employee" deduction. How do I ensure that the pre-tax employee deduction is also included in the Box 12 DD number? The link @JenoP included indicated that both employer contributions and employee deductions will need to be reported in Box 12 - DD.

Thanks for your help.

Hi, AGCorp.

The employee's deduction is covered by the company's group plan, which means the total reported amount on the W-2 form is the deduction for both employee and company and will be reported in Box 12, Code DD.

To check the employee's health coverage deduction, you can pull up the Payroll Summary Report or the Payroll Transaction Detail Report. This report will show all the employee's transactions.

For detailed information about the health coverage in QuickBooks, check this article for reference: Health Coverage Reporting User Guide for QuickBooks.

Also, for additional reference about this health insurance, you can visit the IRS website for the reporting process: Form W-2 Reporting of Employer-Sponsored Health Coverage.

Keep me posted if you have additional questions about the payroll forms in QuickBooks. Have a great day.

Hello again,

I followed the instructions as laid out in the articles below and it still is not accounting for the employee deductions in the w2. I only see employer contribution portion in the box 12 - DD.

Here's the situation. The employer contributed $1000 and was reported in the paycheck and in the company as "Health Coverage Cost" tax tracking type. The employee had payroll deductions for a $1000 as a pre-tax "Premium only/125" tax tracking tracking type.

W2 Box 12 -DD only shows $1000 (instead of $2000). How do I get this to include the employee deduction as well?

Thanks again.

Hello there, @AGCorp

You can create a payroll item and click Health Coverage Cost for the Tax Tracking Type so that the item will be reported on the employee's Form W-2 in box 12, with the code DD.

To create an item:

1. Go to the List.
2. Select the Payroll Item List.
3. Click on the drop-down arrow beside Payroll Item and select New.
4. Select Custom Setup under Select setup method, then click Next.
5. Click Company Contribution under Payroll item type and click Next.
6. Enter the item name under Name used in paychecks and payroll reports, click Next.
7. Select the agency for company-paid liability, click Next.
8. Select Health Coverage Cost under Tax Tracking Type.
9. Click Next until you'll reach Finish.

Once done, you can create payroll and add the item created under Other Payroll Items.

However, if you don't have the payroll item set up previously, you may need to create a liability adjustment and click the item created.

1. Go to Employees.
2. Select Payroll Taxes and Liabilities.
3. Click on Adjust Payroll Liabilities.
4. Add the date.
5. Select Employee and add the name of your employee.
6. Add the item created with the amount under Item Name in the Taxes and Liabilities window.
7. Hit OK.

Let me know if you have any follow-ups or other concerns. I'm always glad to help. Have a great day.

Hi @GraceC  - I already have a company contribution payroll item for Health Coverage Cost Tax tracking type. As i mentioned in the chain before, I see that portion being tracked in Box 12 - DD. I have been tracking this in every paycheck as well. What I don't see is the employee deduction portion in the w2.

How do i get the employee deduction (employee contribution) portion to show up?

Thanks

Hi there, AGCorp,

Let me clarify things out for you. The employee's Health Coverage Cost deduction won't show on the W-2 form. Only the employer-sponsored portion will appear since this is a company contribution.

These screenshots below will highlight this.

You can manually enter the dollar amount for each employee to appear on the form. Also, the premium will reduce boxes 1, 3, and 5.

Upon sharing this, I still suggest consulting your tax advisor. He/She might have specific instructions on how to include the employee portion in the form.

Be sure to review the chart provided on the IRS: Form W-2 Reporting of Employer-Sponsored Health Coverage website to make sure you're including the required (and optional) info only.

Let me know if you have follow-up questions, and I'm always around to answer them. 

Take care always!

@MaryLandTThanks very much for the detailed screenshots.  Appreciate your help.

Thank you for the clarification post! We do not have the second line in the payroll screen "Health Coverage Cost", we just pay employees health insurance through our AP. Is that something that should be tracked through payroll? If so could you give me a quick primer on how to and if it will affect other reporting?

THANK YOU!!