Employer Sponsored Child Care

I can share some information about setting up child care expenses, @Saphire605. 

You can create a company contribution and then add the item to the employee profile. 

Here's how to set up company contribution item:

1. Go to the Lists menu and then Payroll Item List.
2. Click on the Payroll Item dropdown and select New.
3. Choose Custom Setup, then Next.
4. Select Company Contribution, then Next.
5. Enter the item name, then Next.
6. Select the name of the agency to which liability is paid (or add it), the account number, and the expense account that you want to track the item. Select Next. 
7. Set the tax tracking type to None. Select Next three times.
8. Leave the Default rate and limit fields blank. You can add the rate and limit when the item is added to the employee profile.
9. Click on Finish to save the changes.

You can add the item to your employee's profile:

1. Go to the Employees menu and then Employee Center.
2. Choose your employee and click on Payroll Info.
3. In the section for Additions, Deductions, and Company Contributions, add the health benefit insurance items.
4. Enter the amount per period and the limit.
5. Select OK.

Refer to the following article for more information about setting up company-paid contributions to an employee’s retirement or health insurance plan: Set up and manage company contributions. 

From here, you can run a payroll summary report by employee to view the payroll wages, taxes, deductions, and contributions totaled by employees. 

Let me know if you need help setting up child care expenses. I'm always here to assist you. Have a great rest of the day!

Thank you!

You're most welcome, @Saphire605.

I'm glad to hear that my colleague was able to assist you with your inquiry regarding the establishment of your company's contributions.

Please keep in mind that our forum page and this thread are both open for any additional questions or concerns. Take care always!

My company has a dependent care fringe benefit where the first $5000 is not taxed and anything over the $5000 is taxed. The Total amount my company pays goes in box 10 on the w2 and only the taxable portion goes into box 1 on the w2. Is there a way to set this up in quickbooks online? or even in the desktop version? Thank you for your help!

hello, my company has a dependent care fringe benefit where the first $5000 is not taxed and everything above the $5000 is taxed. The full amount goes in box 10 on the w2 and the taxable amount gets added to box 1. Is there a way to set this up on quickbooks online? Or even on the desktop? Thank you for the help!

Hey there, @smokie1.

Thanks for following the thread and sharing your concerns. I hope you're having a great day so far. 

QuickBooks Online Payroll has several preset fringe benefits to choose from. Feel free to check out the fringe benefit you want to set up and follow the instructions in that article. 

Here are the links for all benefits:

• S-corp medical
• Group Term Life Insurance (GTLI)
• Clergy housing
• Personal Use of Company Car (PUCC)
• Health Savings Account (HSA)
• Allowance

Please note: QuickBooks Online doesn't support other fringe benefits at this time. 

However, in the QuickBooks Desktop version, along with the preset benefits, you can add custom fringe benefits. Here's how: 

1. From Lists, click on Payroll Item List.
2. Choose Payroll Item then select New.
3. Tap on Custom Setup.
4. Choose either Company Contribution or Addition and select Next.
   • Company Contribution: Adds the value of the fringe to be taxed but doesn't increase net pay.
   • Addition: Adds the value of the fringe to be taxed and increases net pay.
5. Enter a name for this item and hit Next.
6. Click on an Expense account and Liability account from the drop-down lists and select Next.
7. From the Tax Tracking Type drop-down list, tap on Fringe Benefits and hit Next.
8. Click Next three times.
9. Tap Finish.

Please keep in mind that the fringe benefit needs to be reported on a paycheck before the end of the calendar year so it can be taxed appropriately and reported on your employees’ W-2s. You may need to report large non-cash fringe benefits over several pay periods, so you don’t negatively impact your employee’s net pay. 

For additional information about this process, check out Add fringe benefits to paychecks.

Please don't hesitate to let me know if you have any questions or concerns. Take care and have a wonderful day ahead! 

Thank you for your help Tori! I would definitely need to go to the desktop version to do this as the preset ones in the online version do not match up. Can you please tell me, if i set up a custom fringe benefit on the desktop version, how will it know what boxes to record the dollars into on the w2? For the type of fringe benefit we have (dependent care), the full amount has to be recorded in box 10. Whereas I read most fringe benefits get recorded in box 12 or box 14. I hope it is able to be directed this way. I look forward to hearing back! 

On behalf of my peer Tori B, you're welcome, @smokie1. Allow me to chime in and add more information about setting up a custom fringe benefit on the desktop version.

In QuickBooks Desktop, when you set up a custom fringe benefit, you can specify the tax tracking type for the item. This tax tracking type determines where the amounts will be reported on the W-2 form.

For your specific case of a dependent care fringe benefit where the full amount needs to be recorded in box 10 of the W-2, I highly recommend contacting a tax advisor or accountant for assistance. They can give you enough information to ensure the amount will be reported in the correct box on the W-2 form.

If you don't currently have an accountant, refer to our Proadvisor website to find one. Our advisors can also offer you technical and accounting perspectives. All you need to do is enter your city, state, or ZIP code in the provided box.

When everything is in place, you can use these resources to prepare, file, and print your W-2 form in the program:

• File your W-2 and W-3 forms
• Print your W-2 and W-3 forms

If you have further questions or need assistance with setting up custom fringe benefits in the desktop version, feel free to reach out. I'm here to help, @smokie1.