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Alym
January 14, 2025
Question

940 Interview Fringe Benefit calculation

  • January 14, 2025
  • 1 reply
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I am processing my Federal reports and running the 940. In the interview section of the 940, it says Quickbooks has determined $00___ in exempt payments and then shows the exemptions Classifications :  Fringe, Group term life insurance, Retirement/Pension, Dependent Care and other.

 

So I have 2 questions regarding this:  

  1.  How do I know what items are included in the "FRINGE BENEFITS"?  If I look at my payroll items, I only have 1 items listed under Tax Tracking for  "Fringe Benefits", but the amount listed on the interview form is way more than what shows on my payroll report.  I am looking at calendar year, so I know my dates are correct.  Any ideas how the interview form came up with this number?  I don't want to override it, if it is correct and I'm missing something.

 

2.  The retirement benefit includes both 401K and ROTH 401K employer match, but according to the IRS Roth 401K employer matches are not exempt.  How do I fix this so it doesn't show this number on the interview portion again.  I know I can override the number in the report, but I just want to stop QB from including it in its numbers

1 reply

C
Carneil_C
January 14, 2025

Let's work together and sort out your payroll Form 940 issues in QuickBooks Desktop, @Alym. I'm here to address your queries about fringe and retirement benefits from the interview section of Form 940.

 

For your first question, fringe benefits payroll items include the following:

 

Taxable fringe benefits are included in the employee's gross income and are subject to federal income tax, Social Security, Medicare, and FUTA taxes. These are:

 

  • Bonuses like cash rewards given to employees for performance or holidays
  • Employer-provided vehicles for personal use
  • Gym or athletic club memberships
  • Personal travel expenses paid by the employer
  • Group-term life insurance above $50,000

 

On the other hand, we also have Nontaxable fringe benefits, which are excluded from the employee's gross income and are not subject to federal income tax withholding. It includes:

 

  • Employer-provided spending accounts like flexible spending accounts (FSAs)
  • Transportation benefits like public transportation or parking
  • Child care assistance over $5,000 
  • Employee discounts on company products or services 
  • Small, infrequent benefits like holiday or employee appreciation gifts or occasional meals 

 

Please know that the value of taxable fringe benefits must be included in Boxes 1, 3, and 5 of Form W-2 and on line 3 of Form 940. These are the payroll items to check how the interview form came up with those numbers.

 

Your second query depends on how you set up your 401k. If the employer matches are taxable, you'll need to set them up as taxable.

 

For more information about the retirement plan set up to track and tax it appropriately, feel free to check out this article: Set up or change a retirement plan.

 

Also, we have several reports in QBDT that you can generate based on your preference to view useful information about your business and employees in the future: Run payroll reports.

 

You're always welcome to visit the Community space or reply to this thread if you need more help managing your Form 940 fringe benefits. It will be our pleasure.

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