Set up Sub S Medical insurance mid-year to reflect the entire year
PrintOverview
Sub S Medical is an insurance provided for 2% (or more) shareholders of an S Corporation who are also employees. The corporation pays the shareholder's medical insurance, which is required to be reported in box 1 of Form W-2. The shareholder is responsible for paying State and Federal withholding.
Assumptions
You have already added the employee subject to this deduction in the Employee List.
Expected Outcome
Your Sub S Medical insurance payroll item totals will be correct for the year.
Details
Create a Sub S Medical payroll item if one does not already exist.
- Create a new Payroll Item.
- In QuickBooks Pro and Premier:
- Click the Lists drop-down menu and select Payroll Item List.
- Click the Payroll Item button, and then click New.
- In Simple Start:
- Select Payroll from the top toolbar.
- Choose Setup and Maintain and select View/Edit Payroll Item.
- In the left navigation frame, under Related Activities, select Add a Payroll Item.
- In QuickBooks Pro and Premier:
- Select EZ Setup, and then click Next.
- Click Insurance Benefits, and click Next to open the Insurance Benefits window.
- Select S Corp Medical under Other Insurance.
- Click Next.
- Enter the Vendor name, account number and payment frequency, if available, then click Next and Finish.
Create a new Addition Payroll Item with a tax tracking of None.
Create a new Deduction Payroll Item with a tax tracking of None.
Change the liability account information to the expense account used in the addition item.
Pay the employee.
- In QuickBooks Pro and Premier:
- From the Employees menu, choose Pay Employees and select Unscheduled Payroll.
- In Simple Start:
- Select Payroll from the top toolbar. In the Pay Employees area, select Unscheduled Payroll.
Enter the check date to match the date of the shareholder/employee's last paycheck of the year.
Select the employee name and click View Paycheck Details.
Enter regular earnings items and note the Federal and State withholding amounts.
Remove the wage amounts from the Earnings window, and in the Other Payroll Item window, select the S-Corp Medical Insurance payroll item.
Add the additional item you created in the Other Payroll Item Window of the paycheck for the amount of .01.
Add the deduction item you created in the Other Payroll Item Window of the paycheck for the amount of -.01. The net amount of the paycheck should now be 0.
Click Save & Close.
Click Continue, and then Create.
