View Full Version : Shareholder payroll problem

12-09-2003, 10:13 AM
Shareholder is on payroll and is 100% owner. He receives company paid health insurance. This amount needs to be added to his gross wages for W-2 purposes, but will not be taxable. Help how can we do this in peachtree?

Jim Dale
12-19-2003, 07:47 PM
this requires several steps. you might want to get (sic) peachtree for dummies or contact support.

12-24-2003, 04:32 PM
Why does this need to be added to W-2 wages? Especially if it is not taxable to the employee/shareholder.

Is this being paid totally by the company on behalf of the employee?

12-30-2003, 07:36 AM
A 1099 is also appropriate for an Owners Health Premium I assume you are talking S Corp.

05-01-2008, 06:51 PM
According to the IRS - Health Insurance premiums paid by the S-Corp on behalf of a 2% shareholder have to be added to his wages and are subject to FIT, but Not FICA, FUTA, or Medicare taxes.

THis shareholder then deducts the 'fringe' on his personal 1040 as self-employed insurance expense.

Does any one have a step-by-step how to set this up in Peachtree? Also how does this affect State taxes (MA)?

05-01-2008, 07:03 PM
THE FOLLOWING IS THE QUICK BOOK ANSWER TO THE PROBLEM _...... MAYBE WE NEED TO CHANGE SOFTWARE SINCE THE PEACHTREE SUPPPORT DOESN"T HAVE THE ANSWER ---Yes. You need to increase box 1 (federal taxable wages) and box 14. QB 2007 and higher has a taxable type SCorp Med Prem that automatically sets the defaults for you (it's at the very bottom of the list of taxing types). The default in QB includes this amount in the state as well as federal. However, I called the state of OH and they said these premiums are NOT taxable wages for OH. I changed the taxing options to only include federal taxable. Using this option will take care of everything for the W-2 and the 941/940 reports. Best of luck to you.

01-05-2009, 12:31 PM
The only thing I can really think of is manually making changes when you have the employees information up in the "Payroll Tax Forms - W-2/1099 Preparer" Anyone got a better way?