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We were told that this type of insurance premium is pretax for federal, but not for the State of California. When setting this up in Quickbooks Online, if we set it up as a healthcare deduction, it assigns pretax to Federal AND state - there is no way to separate them.

 

We were told by Quickbooks last year, that the only way to get it to be pretax for federal and not state is to set it up as an HSA, which seems incorrect and creates issues/errors for employees (specifically those using Turbo Tax) when taxtime comes, because the premium is appearing in Box 12, with Code W for an HSA.

 

Can you advise on the pre-tax status for federal vs state? Are you able to post instructions/screenshots for how to set this up in Quickbooks Online?

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