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heazim1
May 19, 2025
Question

Record S-Corp health insurance premiums

  • May 19, 2025
  • 2 replies
  • 0 views

When I record the S-Corp health insurance premium on the owner's paycheck it maps to a liability account.  When I pay the premium, it maps to same liability account, effectively zeroing out the liability account.  How can I record the expense of the S-Corp ins premium?   IF I record the payment to an expense, then the liabiltiy amount stays the same.

Thanks,

 

2 replies

Candice C
Candice C
May 19, 2025

Hey, @heazim1. 

 

Welcome back to the Community! 

 

To record the S-Corp health insurance premium expense, you'll need to make an adjusting journal entry after the premium payment is recorded in the liability account. This entry will debit the health insurance expense account and credit the liability account. This ensures that the expense is recognized for tax purposes and accurately reflects the financial position of the S-Corp.

 

If you need further assistance, we recommend consulting with your accountant. 

 

This should do the trick. Have a wonderful day! 

H
heazim1Author
May 19, 2025

Doing that will record the expense but it will make the liability account wrong.  The liability account is zeroed out by entering the liability through payroll recording and and posting against it when paying the insurance company.

Rainflurry
Rainflurry
May 19, 2025

@heazim1 

 

The response from @Candice C is obviously incorrect.

 

The reason you can't record it as an expense is that the portion of health insurance paid from the employee's wages was already recorded as a wage expense when you ran payroll.  There's no health insurance expense on that portion.  Only the company portion (if there is any) of health insurance is recorded as a health insurance expense and is entered on the bill for the monthly premiums.

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heazim1Author
May 20, 2025

I'm not actually taking the money out of their paycheck. It is only reported there as a benefit to be taxed.  The s-corp health ins payroll item maps to a liability acct, not a wage expense.  When paying the insurance co, it maps to the same liability account, reducing the liability.  I don't believe the wage expense is recorded.

 

QB also says this:

  • If the 2% shareholders have a different plan from other employees or don't offer an insurance plan to employees at all, the plan is fully taxable. This type of plan is only supported in QuickBooks Desktop Payroll.

Is this true?  this is the plan I am working with, so does QBO not support it?
thanks.

 

Rainflurry
Rainflurry
May 20, 2025

@heazim1 

 

Yes, it’s mapped to a liability account (the credit) but the other side of the accounting entry is being recorded as a wage expense (the debit).  That’s how the premiums are able to be added to their W-2 as gross wages in box 1 and in box 14.   That’s my understanding of it.  

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