Section 125 Health Plans
I have a client who has a Section 125 P.O.P. Health Plan. This is set up as two payroll items 1.) Employees Sec 125 Deduction and 2.) Shareholders Sec 125 Deduction. This deduction is not taxable for the employee for FWT, SS, MED, and FUTA. For a Shareholder with more that 2% ownership it is Taxable for FWT,SS, MED and FUTA. QuickBooks makes the correct calculation for the Shareholder for the company portion of of SS, and MED. It does not for the Employee portion. The calculations for the employee are correct for both employee and employer portions of tax calculation. Additionally, the calculation of line 2 on the 941 return, does not deduct the Sec 125 amount for the quarter. What can be done about this?
