Shareholder/officer health insurance setup example

Example details

Setup

Select
Setup
, then
Payroll Items
.
Enter
2% Shareholder Health
for the description and select
Pay
as the type.
Select
Fixed amount
for the calculation type.
Select
Fringe benefits
for FUTA exempt payments.
Mark the
Box 14 - Other
checkbox and enter
2% SH Health
as the description.
Mark the
Amount from gross pay presentation
and
Net pay
checkboxes for exclusions.
note
The checkboxes are marked assuming that the shareholder health amount shouldn't display in YTD gross and net pay when printing reports, and in gross or net pay on any paystubs.
The amount will still display as taxable wages for FIT on the Payroll Tax Summary report.
Select the
Tax Exemptions
tab and mark the
All
checkbox.
Clear the
Federal Income Tax
checkbox. This lets only the federal income tax calculate for this pay item.
Clear state and local withholding checkboxes.
Select
Enter
.
Select
Setup
,
Employees
, then the
Payroll Items
tab. Mark the
Active
checkbox for
2% Shareholder Health
to turn on the new pay item.

Process

Select
Actions
, then
Enter Transactions
. Add a payroll check for the shareholder dated 12-31-2022.
Override the amount of the 2% Shareholder Health pay item with the total amount of the health insurance.
Override any other pay and deduction items to $0.00.
FIT will calculate for the payroll check. Override the amount to 0.
Override state and local withholding amounts to zero, if necessary.
Mark the
Handwritten
checkbox. This lets you finalize the check without printing.
Select
Enter
to save the payroll check.

Other resources

Form W-2 Reporting of Employer-Sponsored Health Coverage
General Instructions for Forms W-2 and W-3