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wnb141
April 6, 2024
Question

How to reimburse S-Corp health insurance premiums?

  • April 6, 2024
  • 1 reply
  • 0 views

We use Quickbooks Online Payroll. Our company will reimburse the 100% owner of the S-Corp for health insurance premiums paid personally. We do not offer this benefit to other employees. Therefore, the reimbursement is subject to FICA/Medicare taxes and must be done via a payroll check as taxable income. The only information I can find says, "This type of plan is only supported in Quickbooks Desktop Payroll" (not in Online Payroll). That can't be right. Is my only option to stop using Online Payroll? There must be a way to do these payments. Thanks!

1 reply

S
SheandL
April 6, 2024

Hi there, @wnb141. You can use your QuickBooks Online Payroll to reimburse S-Corp health insurance premiums. I'm here to guarantee you'll make this happen.

 

Firstly, you need to create one so it will reflect on your employee's paycheck and tax form. You can follow the steps I'll provide below.

 

  1. Go to Payroll and Employees.
  2. Select an employee.
  3. Toggle to Pay types, then click Start or Edit.
  4. Choose S-corp Owners Health Insurance in the Additional pay types section.
  5. You can enter an amount there or leave it blank, then add an amount as you run payroll. 
  6. Click Save.

 

Afterward, we can report this contribution on your worker's paycheck and add it as you run a scheduled payroll, or create a fringe benefit.

 

You can read this article for reference: Set up an S-corp medical payroll item for your corporate officers.

 

If you want to keep track of your S-Corp contributions in QBO, you can check out this article: Run payroll reports in QuickBooks Online Payroll. 

 

Keep me posted by replying to this post if you have further questions about reimbursing S-Corp in QBO Payroll. I'll have your back anytime.

R
RayeLLC
May 27, 2024

I am also trying to find out the proper way to reimburse an S Corp owner for health premiums. I believe what you are doing is just showing how to add to their payroll check the amount paid on their behalf to the insurance company for that pay period if the company is paying the premium (no additional money is added to the owners check in this instance). This question is asked many times and I have yet to see the correct answer. We want to know what is the proper way for the company to write a reimbursement check or add additional funds to the owners payroll check to reimburse the owner for purchasing a health insurance policy on their own (>2% S Corp Owner).  Thank you.

M
MirriamM
May 28, 2024

Hello there, RayeLLC.

 

You can create a Check or Expense transaction to record a reimbursement check or add additional funds to the owner's payroll check for purchasing a health insurance policy.

 

To do this, here's what you'll need to do:

 

  1. In the left menu, click the + New button.
  2. Choose Expense or Check.
  3. Enter the owner's name in the Payee field and select the bank account from which the reimbursement will be made.
  4. Select the appropriate account for health insurance reimbursement in the Category details section. 
  5. Enter the amount.
  6. Choose Save and close.

 

Before doing the steps above, it's best to seek advice from your accountant or financial advisor to ensure compliance with tax regulations and accounting best practices.

 

You may also want to take a look at these articles for guidance on the most effective methods for reimbursing an employee and documenting business expenses paid for with personal funds:

 

 

If you have any other inquiries about QuickBooks, feel free to visit the Community. We're here to ensure that you receive the assistance you need. Have a great day, RayeLLC!

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