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Add Health Insurance to W-2 Wages

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  • Add Health Insurance to W-2 Wages

    My outside accountant has told me I need to add the business owner's health insurance to his W-2 wages in box 1, 16 & 18. To do this, she has advised me I need to set up a gross pay item not subject to FICA, SUTA and FUTA. Any clues how I would do this?

  • #2
    You would add another Income Category under the Maintain - Employee - EmployEE Tab. You would then list the approriate GL Account for posting any monies to i.e. an Payroll or related Payroll Expense Account. Later you would then click on the ADJUST button adjacent to each of the respective EmployEE and separately EmployER Taxes ie. Federal, FICA, SUI etc. and varify that this secondary Income account is check to be included in this tax calculation or unchecked for Not to be Included. In the Owner' Employee Record (Maintain - Employees), you will list the amount of the Insurance per payroll period under this same heading on the EmployEE Tab. You will mark this same line with a check mark under the column heading labeled MEMO. This means that you are not disbursing this amount of money but you are listing it for tax calculation purposes ONLY.

    You can test this configuration using one of the Peachtree Sample Companies before committing your company.
    Rick Prindiville
    PCO Consulting Services, Inc.
    rick@pcosupport.com
    Peachtree Certified Consultant
    Sage Certified Trainer

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    • #3
      Rick,
      Thanks for your response! I did try this but am still pulling my hair out because that income category I created (which I called HLTH ADDBACK) is still calculating additional taxes to be generated on both the employee and employer side.

      In the maintain/default information/employees I set up the "Salary Pay Level" of HLTH ADDBACK. I am assuming that is what you mean when you say to create a new "income category". Am I correct?

      I then unchecked all the tax categories (EE and ER) in the tabs EmployEE Fields /Adjust and EmployER/Adjust so that HLTH ADDBACK was not checked. I also checkmarked the memo field here on the EmployEE Fields as there is not a memo field under the individual employee record - only here. I am using Peachtree Pro Accounting 2008., so maybe there is a difference in terminology or where things are found. To just try something... I also went back into EmployEE(ER) Fields/Adjust and changed all of the tax fields to checked to see if I got different tax calculations. My taxes calculated the same regardless if I had the tax fields checkmarked or not checkmarked. This doesn't make sense to me.

      Any ideas what I am missing here? Thanks so much! Susan

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      • #4
        Susan M:

        "In the maintain/default information/employees I set up the "Salary Pay Level" of HLTH ADDBACK. I am assuming that is what you mean when you say to create a new "income category". Am I correct?" NO!

        You do NOT want to setup the HLTH ADDBACK in the Salary Pay Level as you do not have the control over the Taxes Calculated for this section that you are wanting. I stated in my prior post to set this element in "Maintain - Employee - EmployEE Tab" as here you CAN control the taxes. Please review my prior post again.
        Rick Prindiville
        PCO Consulting Services, Inc.
        rick@pcosupport.com
        Peachtree Certified Consultant
        Sage Certified Trainer

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        • #5
          Rick,
          At the Maintain/Employee/Employee tab, I cannot add anything and see nothing listed as "Income". In my screens, I can only customize for that employee what was already set up in the Maintain/default information/employee section. Limitation of my version?

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          • #6
            Seemingly, I was not clear in my prior posts. Go to Maintain-Default Information - Employees - EmployEE Tab and add a new heading at the bottom of the existing list of taxes, deductions and other sources of Income. Here add the new misc source fo Income ie. HLTH ADDBACK. Enter in the related GL Account and do not check the CALC column. Leave the formula and the Amount fields blank. Enter a check mark on the same line under the column labeled MEMOS.

            Staying on the same screen click on the Adjust button next to each Tax ie. Federal Witholding, Social Security, Medicare and place or remove the check mark adjacent to the HLTH ADDBACK. A Check Mark indicates that this money is to be included when calculating this particular tax. Repeat this step under the EmployER Tab or Company Tab (depending on your version of Peachtree).

            The EmployEE Tab can be used for either Deductions, Misc. Income or Other ie. Vacation, Sick, 401K, Dental, Insurance, Child Care, Loans, Support etc. As such there isn't anything that says INCOME as you have suggested that you are looking for. In the Employee File, you will either enter a positive $value in the case of an additional Income or a negative $value in the case of a deduction.
            Rick Prindiville
            PCO Consulting Services, Inc.
            rick@pcosupport.com
            Peachtree Certified Consultant
            Sage Certified Trainer

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            • #7
              Any Followup from Susan

              Susan did you grt the problem solved?

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