Skip to main content
R
rolandgarton
January 28, 2024
Question

Tax Type and W2 code for Employee contributions to Group Health Insurance

  • January 28, 2024
  • 1 reply
  • 0 views

I have a group health insurance plan to which employees contribute after-tax payroll deduction.  I understand such deductions should appear in box 12 of the W2 with code FF.  (At least that's what QuickBooks Online does.)  Can an accountant confirm this?

 

With QuickBooks Desktop Payroll, what Tax Type should I choose for the associated payroll item so that the total employee contributions for the year show up in the correct place on the W2?

1 reply

BigRedConsulting
BigRedConsulting
July 1, 2024

I think code FF is not for deductions, but to report the amount of the potential benefit under a Qualified Small Employer HRA account, or QSEHRA.

 

The W-2 Instructions read:

Code FF—Permitted benefits under a qualified small employer health reimbursement arrangement.

Use this code to report the total amount of permitted benefits under a QSEHRA. The maximum reimbursement for an eligible employee under a QSEHRA for 2024 is $6,150 ($12,450 if it also provides reimbursements for family members).

 

Report the amount of payments and reimbursements the employee is entitled to receive under the QSEHRA for the calendar year, not the amount the employee actually receives. For example, a QSEHRA provides a permitted benefit of $3,000. If the employee receives reimbursements of $2,000, report a permitted benefit of $3,000 in box 12 with code FF.

----------------------------

To set this up in QuickBooks, create a Company Contribution payroll item and pick the tax tracking type "Qual. Small ER HRA". Enter the total amount that can be awarded on the item and make that the annual limit as well. OR, if the amount varies per employee, then don't enter the amount or annual benefit limit on the item, but instead enter these values on each employee as you add the item to the employee.

Terms & ConditionsAccessibility statement