Medicare Premium Reimbursed to Employee

Hello there, ShawnaK.

I understand you want to ensure a smooth transition to Medicare for your employee and are considering reimbursing his Medicare premiums. It's great that you're looking out for your employee's well-being.

In QuickBooks Desktop (QBDT), we can create a new non-taxable payroll item for reimbursement. Here's how:

1. Go to the Employees menu.
2. Hover over Manage Payroll Items, then select New Payroll Item.
3. Select Custom Setup, and click Next.
4. Tap the Addition radio button, then Next.
5. Enter the item name. Select Next.
6. The default account for the expense is Payroll Expenses, then Next.
7. Set the Tax Tracking type to None. Then select Next.
8. Under Taxes, don't select any of the payroll items. Hit Next.
9. For amounts paid per mile/kilometer, select the Calculate this item based on the quantity radio button. Tap Next.
10. Choose to calculate on net pay, and then Next.
11. Put a default rate. Pick Finish.

Once done, you can now reimburse your employee. I'll guide you on how to do it.

1. Go to the Employees menu, then select the Employee Center.
2. Choose your employee.
3. Go to the Payroll Info tab.
4. Add the item from the dropdown list under Additions, Deductions, and Company Contributions.
5. Hit OK.

When creating paychecks, the reimbursement item will appear in the Other Payroll Items section of the Preview Paycheck screen. Enter the amount on the paycheck.

Furthermore, you can issue a vendor check if you prefer to pay the reimbursement separately from payroll. It's important to maintain detailed records for tax and reporting purposes.

Additionally, you can check these guides about managing payroll items and learn how QuickBooks calculates your taxes:

• Manage payroll items for your insurance benefits plan
• Understand your payroll tax calculation

Let me know if you have other payroll-related questions. I'm always here to answer them for you. Take care.