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ChristineA7
January 22, 2024
Question

Employer Sponsored Child Care Subsidy

  • January 22, 2024
  • 1 reply
  • 0 views

How do I document a company contribution (Child Care Subsidy) when I'm paying each employee directly (a non-taxable benefit) and not an agency.  For example: If I create a company contribution in payroll, it asks "Enter name of agency to which liability is paid".  An agency does not exist because the company contribution is going to each employee directly, I just need to ensure that it is non-taxed income and that it shows up in box 10 on their W-2.  How do I input this in quickbooks desktop payroll?

1 reply

R
RCV
January 23, 2024

Let me share some information about setting up child care expenses, ChristineA7.

 

We'll need to create a company contribution and then add the item to the employee profile. Here's how to set up company contribution item:

 

  1. Go to the Lists menu and then Payroll Item List.
  2. Click on the Payroll Item dropdown and select New.
  3. Choose Custom Setup, then Next.
  4. Select Company Contribution, then Next.
  5. Enter the item name, then Next.
  6. Select the name of the agency to which liability is paid (or add it), the account number, and the expense account that you want to track the item. Select Next. 
  7. Set the tax tracking type to None. Select Next three times.
  8. Leave the Default rate and limit fields blank. You can add the rate and limit when the item is added to the employee profile.
  9. Click Finish to save the changes.

 

Once done, add the item to your employee's profile:

 

  1. Go to the Employees menu and then Employee Center.
  2. Choose your employee and click on Payroll Info.
  3. In the section for Additions, Deductions, and Company Contributions, add the health benefit insurance items.
  4. Enter the amount per period and the limit.
  5. Press OK.

 

You can check out this article for more information about setting up company-paid contributions to an employee’s retirement or health insurance plan: Set up and manage company contributions. 

 

From here, you can run a payroll summary report by employee to view the payroll wages, taxes, deductions, and contributions totaled by employees. 

 

Let me know if you need help setting up childcare expenses. I'm always here to assist you. You have a good one. 

C
ChristineA7Author
January 23, 2024

I appreciate your response - but the directions do not pertain.  As I stated in my question, the payments are going directly to each individual employee and are non-taxable (subsidizing child care).  NOT AN AGENCY as noted in the provided direction #6 that you provided:  This sequence of steps does not work for my case.

 

Select the name of the agency to which liability is paid (or add it), the account number, and the expense account that you want to track the item.

 

How do I provide a cash benefit to an employee that is non-taxable?  Thank you for all your assistance.

R
Rea_M
January 23, 2024

Since you require that the company contribution (sponsored childcare subsidy) shows up in box 10 on employees' W-2s, you'll have to include it when running payroll, ChristineA7. We'll just have to leave the agency and account number blank when setting up the item so you can provide the benefit to them as non-taxable. I'll guide you on how to do this below.

 

  1. Go to Lists, then Payroll Item List.
  2. Select the Payroll Item dropdown, then New.
  3. Choose Custom Setup, then Next.
  4. Select Company Contribution, then Next.
  5. Enter a name for the item and select Next.
  6. Leave the agency and number blank. Then, select the liability and the expense account where you want to track the item, then select Next. 
  7. In the Tax Tracking Type window, select the specific contribution item. Select Next twice.
  8. Under Calculate based on quantity, select Neither, then Next.
  9. Leave the Default rate and limit fields blank. You can add the rate and limit when you add the item to the employee profile.
  10. Select Finish.

 

After that, add the company contribution item to your employee profile and run payroll if necessary.

 

Once you're ready, submit your W-2 forms to the federal and state agencies through QuickBooks Desktop Payroll.

 

Don't hesitate to click the Reply button if you have further questions about company contribution setup and other payroll concerns. I'm always here to help. 

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