Set up a Health Savings Account (HSA) item in QuickBooks

A Health Savings Account (HSA) is a savings account employees use for out-of-pocket medical expenses. HSA-qualified health plans generally cost less, and the funds in an HSA do not expire. You and your employees can both contribute to an HSA based on IRS annual limits.

Set up employee HSA contributions

Before setting up a plan, determine if your employee is eligible by reviewing IRS Publication 969 or checking with your plan provider. Employee contributions are either pretax (made through a Section 125 cafeteria plan) or taxable (after-tax).

QuickBooks Online Payroll

If you use Intuit Enterprise Suite and have multiple companies, you can see all employees for all of your companies in the consolidated employee dashboard. From any of your companies:

1. From the Company Switcher dropdown, select Consolidated view.
2. Go to All Apps , select Payroll, then select Employees.

From the employee dashboard, you can:

• Search for a specific employee
• Filter the view to see all employees for a specific company
• Customize the info that shows on the dashboard
• Make changes to employee info

1. Go to All apps , then Payroll, then Employees (Take me there).
2. Select your employee., then select Job & pay.
3. From Deductions and contributions, select Add or Edit.
4. Select + Add deduction/contribution.
5. From the dropdown menu, select HSA plans for the Deduction/contribution type.
6. Select Pretax HSA or Taxable HSA for the Type.
7. Enter a Description for the paycheck.
8. Select how the contribution is calculated and enter the amount or percentage.
9. Add an Annual maximum amount.
10. Select Save then Done.

QuickBooks Desktop Payroll

1. Go to Lists, then select Payroll Item List.
2. Select Payroll Item and select New.
3. Select Custom Setup and select Next.
4. Select Deduction and select Next.
5. Enter the item name and select Next.
6. Select the name of the agency and the account number, then select Next.
7. Set the Tax Tracking Type as HSA Emp. (Taxable) or HSA Emp. (Pre-tax) and select Next.
8. In the Taxes window, select Next.
9. In the Calculate based on quantity window, select Neither and select Next.
10. In the Gross vs. Net window, select Net pay (this only applies to Taxable tracking) and select Next.
11. Leave the Default Rate and Limit fields blank and select Finish.

Set up employer HSA contributions

QuickBooks Online Payroll

1. Go to All apps , then Payroll, then Employees (Take me there).
2. Select your employee., then select Job & pay.
3. From Additional pay types, select Add.
4. Select Company HSA Contribution.
5. Add a Recurring amount per period if applicable.
6. Select the Effective pay period and End pay period.
7. Select Save.

QuickBooks Desktop Payroll

HSA Contribution Limits

1. Go to Lists, then select Payroll Item List.
2. Select Payroll Item and select New.
3. Select Custom Setup and select Next.
4. Select Company Contribution and select Next.
5. Enter the item name and select Next.
6. Select the liability agency and account number.
7. Choose specific liability or expense accounts if desired, then select Next.
8. Set the Tax Tracking Type as HSA Co. (Taxable) or HSA Co. (Nontaxable) and select Next.
9. In the Taxes window, select Next.
10. In the Calculate based on quantity window, select Neither and select Next.
11. Leave the Default Rate and Limit fields blank and select Finish.

HSA Contribution Limits

The IRS sets annual limits for total contributions (employer and employee) and catch-up contributions for those age 55 or older.