How To Set up Health Savings Account (HSA) Plans In QuickBooks

Do you want to set up your contribution to health savings account (HSA) plans in QuickBooks? Don’t worry you need to follow just easy and simple steps to contribute to HSA. This article will tell you how you can set up your own health savings account (HSA). But before doing anything you should have proper knowledge of it. So, here are some points that makes you more friendly with the HSA plans.

What is Health Savings Account (HSA)?

A health savings account means sometimes urgently we need money for our medical expenses. So in this case, if you don’t want that your bank account will be empty.  So there is a solution you can especially open a savings account which is absolutely tax-free. Use that account for saving some money for health savings.

Some advantages of a health savings account?

Some advantages of a health savings account are:

  1. The money you put in this account will be tax-free.
  2. The amount of interest you will get in will be tax-free.
  3. Let’s say if you don’t take your money for use. So it will be safe for another one year also It will not decrease.
  4. This HSA amount will be beneficial at the time of requirement. When you will cross the age of 64 you can use this money for anything there is no penalty for you.
  5. And it is the type of investment it will help you in the future for medical expenses or others.

Determined contribution

It is the responsibility of employers to determine eligibility of an employee And HSA contribution for an annual maximum. Automatically giving a Limit to the annual maximum is not in the hand of intuit. Because these are very widely planned. Employers and employees can also make a contribution in the HSA account. 

The limit to the contribution according to 2019 are:

  1. Maximum $3,600 can contribute to the HSA By every individual (who are eligible) annually for 2021
  2. Maximum $7200 can contribute to the HSA for family coverage annually for 2021.
  3. There is also a contribution for the individual who is the age of 55 or more whose contribution can be $1000 from 2009 known as catch up contribution.
  4. At the year which is taxable, Those people who are eligible on the day one of the last month of the year. We can contribute to the annual contribution. If they are 55 or more they can also do the contribution (catch-up). But sometimes people are not eligible for the annual and catch-up contribution. You can apply for pro-rata which is based on How many months the taxpayer was eligible In that year.

Setting up an employee HSA contribution

For QuickBooks Online Payroll

  1. First, from the payroll menu, you need to choose employees
  2. Now click on the employee’s name
  3. Then click on the edit option which is behind the payment option.
  4. Now you will see the +add detection option in Section 4 click on it
  5. Click on the deduction and contribution, Then click on the new deduction or contribution, Then click on the HSA plans.
  6. Now you will see the 2 options pretax HSC or taxable HSA choose any of them.
  7. Now you need to write a description and add the amount per pay period.
  8. After all, click on Ok. 

For Intuit Full Service Online Payroll

In this, you can only choose from the pre-existing deductions. But if you want to set up a new Deduction you can easily contact the Support team of payroll. If you want to contact them go to their help section In the payroll account.

  1. First, you need to choose the employee’s name from the employees.
  2. Click on the edit option from the deduction in the contribution section
  3. Choose to add a description.
  4. From the deduction (it is a drop-down), click on taxable HSA/pretax.
  5. In the Amount per period, type the amount, So from the pay of the employee, it will be deducted by the choice of the maximum amount of annual.
  6. Click on save.

Intuit Online Payroll

  1. First, you need to choose the employee’s name from the employees.
  2. Click on the edit option from the deduction in the contribution section.
  3. Go to the add a deduction From the deduction in benefits.
  4. Then click on a new direction.
  5. Then you will see our dropdown as a “category”, Under that choose HSA plans.
  6. Then there is another dropdown as a “type”, under that choose pre-tax HSA or taxable HSA.
  7. Then write a description and add an amount per period.
  8. Then choose to save and click on Ok. 

Setting up the employer HSA contribution

For QuickBooks Online Payroll

  1. First, from the payroll menu, you need to choose employees
  2. Now click on the employee’s name
  3. Then click on the edit option which is behind the payment option.
  4. Now you will see the edit option in Section 3 click on it.
  5. A section is available as “more ways to pay”. Expand it.
  6. Click on the HSA contribution of the company.
  7. Click on done.

Intuit Full Service Online Payroll

  1. First, you need to choose the employee’s name from the employees.
  2. Now you will see an option as “pay”. From that click on the edit button.
  3. Now you will see an option as “additional pay”. There is an option to show all pay types click on it.
  4. Click on the HSA contribution of the company. But sometimes the contribution by the company will be equal in every pay period, Then type the amount in the dollar in the field of the recurring amount.
  5. Click on save

For Intuit Online Payroll

  1. First, you need to choose the employee’s name from the employees.
  2. Now you will see an option as “pay”. From that click on the edit button.
  3. There is a section on what additional ways do you pay the employee, you need to choose to show all pay types.
  4. Choose the company’s contribution. After this type the amount 
  5. Click on ok.

HSA contributions & W2 forms

  • If the HSA has contributed by the company and both the employee deductible is by an employee, So on the w-2 form, box-12 will show the sum of both the accounts.
  • In the box-12, your contribution is recorded on the W2 form. And most in the state wages and removed in the federal wages. The annual HSA contribution of the company is reported in box-12 with the W code and w2 of the employee.
  • In the case at the level of state or local, your contribution is having taxes. They add the amount in the wages of local and taxable states.
  • Remember the contribution by the HSA of the company the amount of it will not add to the net pay of the employee. This responsibility is of the employers that contribution will be deposited by the provider of HSA.

Is Intuit debit payments to the plan providers?

The funds that are withdrawn can not be sent to the employee by the intuit payroll or the contribution of the company will not be provided to the plan providers. This is the responsibility of the employer

Eligibility for qualifying the health saving account (HSA)

  1. For opening an HSA account it is required to cover a high deductible health plan (HDHP). 

In the year 2020, the highest deductible plan is the IRS. Another plans deductions are $1400 for a single person and for the family are $2800

  1. You should not have any health coverage but there is one exception that is permitted through the IRS is accepted.
  2. You should not be registered in medicare.

Hope, this article will help you, but still, if you want any help then feel free to contact our technical support team by dialing our toll-free +1-844-405-0904 and get instant help from our intuit certified ProAdvisor.

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