Recording and reporting health insurance details of employees to the authorities is a huge responsibility that employers have to shoulder. To help make things easier for them, QuickBooks has come with feasible features that make entering information smooth.
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What is Health Insurance on W-2s all about?
The employers are liable to record and report the cost of health care coverage sponsored by them on a W-2 of an employee, under the Affordable Care Act, or ACA. The W-2 forms are for information-purpose only, containing useful details on the employee’s health insurance sponsored by employers.
Why Report Employer Health Insurance on W-2s in QuickBooks?
When it is QuickBooks, accuracy is almost guaranteed. As data entry is smooth, employers hardly find any issue in reporting the details to the concerned authorities. The payroll, however, doesn’t generate the health insurance sponsored by employers automatically on W-2s.
Step to Reporting Employer Health Insurance on W-2s via QuickBooks
Follow the below mention steps to reporting employer health insurance on W-2s via QuickBooks.
Option 1: Enter Details
Once you know you require reporting health insurance, here are the steps you will need to follow:
- Ensure auto pay and file option is turned on
- Choose Taxes &Returns
- Select Taxes
- Choose Annual Forms
- Click on W-2, Copies B, C & 2
- Go to the Printable Employee Copies: Form W-2 page
- Choose Health Coverage link
- Choose Go Here, if you are doing it for the first time
- Choose Need to update… option for Health Coverage amounts for box 12
- Enter the amount with the dollar sign:
Option 2: Track Details
- Go to the Employees menu
- Choose Manage Payroll Items
- Select New Payroll Item
- Select Custom Setup
- Click Next
- Select Company Contribution
- Click Next
- Give a unique name for the new payroll item. This will appear on the pay vouchers and pay stubs of employees
- Click Next
- Leave text boxes blank for agency information
- Click on the dropdown menu beside the Liability Account box
- Choose Add New
- Choose Other Expense for the Account Type
- Have a new account created with a new name and add it
- Click on Save & Close
- Click Yes and ignore the warning message that appears
- Select the Health Coverage Cost option from the dropdown for tax tracking type
- Click Next thrice
- Choose Finish
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Why Report Health Insurance on W-2s?
The employers are liable to record and report the cost of health care coverage sponsored by them on a W-2 of an employee, under the Affordable Care Act, or ACA.
Does this Reporting make the Insurance Taxable for Employees?
No. It will remain tax-free.