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peggysue-utma-co
March 10, 2023
Question

Contributions to Simple IRA not calculating correctly.

  • March 10, 2023
  • 1 reply
  • 0 views

QB Online Payroll notified me on March 7, 2023 that SIMPLE IRA employer contribution is calculated "not on the entire gross pay" but from the taxable gross pay less pretax/non-taxable deductions.  Therefore, QB is basing this on gross pay less employees contributions to his share of health insurance premium and HSA.  They responded saying they determined that payroll corrections are not needed, but conveniently neglected to reference the IRS tax code that they based their decision on.  I have read through multiple IRS publications and it states employers must match salary reduction contributions up to 3% of employee's compensation.   The employee share of his health insurance and HSA is deducted from his "entire gross pay, not from a net pay.  My payroll has been wrong all of 2023 and from reading through some threads, it sounds like this has been an ongoing Intuit problem for years.  QB Online Payroll, either fix the glitch with the calculations or back up your claim with the exact IRS tax code.

1 reply

DHeraV
DHeraV
March 10, 2023

I understand how much you wanted this thing sorted out, peggysue.

However, it is how the system calculates, and the option to change it is unavailable. Based on the type of deduction you have configured. Before any other taxes or deductions are calculated, the pre-tax insurance premiums are subtracted from the gross pay.

If you find the Simple IRA calculation wrong, I recommend contacting our QuickBooks Online (QBO) Payroll Support Experts. You can ask them to adjust and change your payroll. 

To contact them, here's how:
 

  1. On your QBO account, go to Help (?), then select Contact Us.
  2. Enter your concern, then select Let's talk.
  3. Choose a way to connect with us:
    • Start a chat with the support expert.
    • Get a callback from the next available expert.

 

Moreover, I'll also share this link where you can search for articles that can serve as your reference to guide you in managing your payroll: QuickBooks Online Payroll Help Articles.

Feel free to leave a reply if you have additional queries about the Simple IRA calculations in QuickBooks. The Community team always has your back. Keep safe.

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