When setting up a reimbursment for S-corp owners health insurance, does that amount get added to the paycheck or do I need to add that amount to the gross pay?

Hi there, Marla.

Yes, the health insurance premium reimbursement for S-corp owners is considered taxable wages and needs to be included in the gross pay.

The IRS requires S-corp owner health insurance premiums to be added to gross wages and reported on the W-2 (boxes 1, 3, and 5) so that FICA taxes can be properly withheld and reported, even though the owner can later deduct the premiums on their personal tax return.

Since the health insurance shows as Other Pay but didn't increase your paycheck, let's verify it's set up correctly. Check your paycheck details to confirm the amount is added to your gross pay line. If it's not adding to gross pay, the pay type may be configured incorrectly as a deduction instead of taxable wages.

For more detailed information on how to set up an S-corp in QuickBooks Online Payroll, check out this article: Set up an S-corp medical payroll item for your corporate officers.

If you're unsure about your specific situation or need clarification, it’s a great idea to consult an accountant or payroll professional familiar with S-corp tax laws. Your accountant can advise the best way to handle the reimbursement based on your business needs.

If you are interested in streamlining your payroll process, Explore QuickBooks Payroll.

For future reference on how to run payroll reports in QuickBooks Online Payroll, refer to this article: Run payroll reports.

Feel free to return here anytime you need assistance.

Hi @marla15,

I just wanted to follow up to check if the resolution we provided helped resolve your issue.

Please let us know if everything is now working as expected or if you're still experiencing any problems.

We'll be glad to assist further if needed.