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bjk1
January 22, 2021
Question

S Corp Owner health insurance

  • January 22, 2021
  • 1 reply
  • 0 views

I'm trying to add S Corp Owner's health insurance to the owner's payroll in QB Online via Run Payroll: Fringe Benefit Only.  I can add the fringe benefit amount and override the employee's Federal & NY state tax withholdings, but the system doesn't allow me to override the local NY City withholding tax.  Why and is there any workaround?     

1 reply

M
Maybelle_S
January 22, 2021

Glad to see you here in the Community, @bjk1.

 

The Do Not Withhold option for federal and state income taxes in the employee's setup/information may have been checked. To verify this, let's proceed to the employee's profile.

 

Here's how:

  1. Go to the Payroll menu, and then select Employees.
  2. Select the name of the employee to open their profile.
  3. Click the edit pencil icon beside Pay.
  4. Next to the withholding section, click the edit pencil icon.
  5. Check the Federal Filing Status/State Filing Status.

Also, you can run a payroll report to check the details of your employees. I suggest you use the Payroll Summary by Employee report to view a comprehensive report of wages, deductions, and tax info.

 

You may also consider checking out this article for more insights about why this is happening: 0.00 or no income tax withheld from a paycheck.

 

Drop a comment below if you have other questions. I'm more than happy to help. Take care!

B
bjk1Author
January 22, 2021

Thanks for replying Maybelle, but you misunderstood the issue.  The employee's withholding setup is correct.  Federal withholding, state withholding & city withholding are all applicable to this employee's normal compensation and was in fact properly done throughout the year.   

 

The issue is that since this employee is also the S Corp owner, his health premiums (paid by the company during the year) need to be added to his gross taxable compensation for payroll reporting (W-2, 941, 940, etc.).  This fringe benefit is not subject to Social Security, Medicare, or income tax withholding.  After I enter the fringe benefit amount [Run Payroll: Fringe Benefit Only] I click on the pencil and expand the Employee taxes category.  Here's where the problem is.  The Federal income tax, NY State income tax and NY City income tax boxes are all pre-populated with tax withholding amounts.  The system allows me to override Federal and NY State withholdings to zero....but does NOT allow me to do the same in NY City withholding.   

J
JonpriL
January 22, 2021

Hello @bjk1,

 

Since you're still unable to edit the state withholding amount for the owner's payroll, I'd recommend contacting our Payroll Care Team.

 

With their tools, one of our specialists can help you on how to enter the correct amount withheld in a payroll. To do so:

  1. Go to Help.
  2. Select Contact Us.
  3. Enter Payroll Withholding in the What can we help you with? field.
  4. Click Continue.
  5. Choose a channel where you wish to connect with our dedicated support.

In the same manner, I've got you this helpful article for guidance in preparation for the 2020 tax season: QuickBooks Online Payroll Year-end Checklist.

 

If there's anything else that I can help you with, please let me know by leaving any comments below. I'll be here to lend a hand.

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