FICA taxes on health benefit in Sub-S corp

[MarkMcKenna]

I am a more than 2% owner in a subchapter S corp. Therefore according to the IRS, the portion of my BlueCross that is paid by the company is taxable for Federal Income Tax. However it is not taxable for Soc. Security and Medicare. However, I cannot get Peachtree to set up my gross as
Gross=Salary+BlueCross for Fed Tax and
Gross=Salary for Soc. Sec. and Medicare calculations.

[Kerriberry]

More information is needed: How does the company pay your insurance? Is paid to you thru the payroll module? Instead of another deduction, does the amount show up as a negative deduction (an increase in the net pay)? If so then the solution to calculating Fed WH & SS/Med is fairly easy. However, if the company simply cuts you a reimbursement check then my solution won't work. Let me know before I go thru the whole process.

[MarkMcKenna]

Hi Kerri:

The health benefit shows up as a line in the salary field side of the payroll module as

Health Benefit 50400 232.69
Salary MM 75400 xxxx.xx


On the deductions side, there is the following:

Health Benefit 74000 -232.69


I hope this helps.

thanks for your assistance.

Mark

[Kerriberry]

Hi Mark! Hope this works!

*Go to Maintain/Default Info/Employees.
*Click on EmployEE Fields.
*Fed WH Line - Click on the black arrow at the far right (Adjust).
This screen is where you define exactly how Fed WH is calculated. Make sure that there's a check mark in front of Gross ONLY. This means that the program will use the Gross Wages (which is the total of all amts on the left hand side of the PR entry screen) to calculate Federal WH. Click SAVE/OK.
*Soc Sec & Medicare Lines - Click the Adjust arrow. The items to be checked should be the Gross Wages AND the BC Insurance deduction field. This defines the deduction as using Gross Wages less BC Insurance to calculate SS & Med. Click SAVE/OK.

Assuming I understood your issue correctly, this should work. Let me know if it does not.