Learn how to set up S-Corp health insurance in your Online Payroll account.

Do you need to record S-Corp Insurance? There are three ways to do this.

  • Option 1: Employee Tax Loan
  • Option 2: Lowering or zeroing out taxes
  • Option 3: Company pays taxes

In this article we'll show you how to first set up the S-corp pay type. And then how to record each of the options in your Online Payroll account.

Set up an S-Corp pay type

First, set up the S-Corp pay type.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Employees. Then select the employee's name.
  2. In the Pay section, select Edit.
  3. In the What additional ways do you pay [employee's name] area, select Show all pay types.
  4. Select S-Corp Owner's Health Insurance.
  5. You can add an amount or leave it blank. You will have the option to enter the S-corp amount when you run payroll.
  6. Select Ok.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employees.
  2. Select the employee's name
  3. Select the edit (pencil) icon beside Pay.
  4. In section 3, select the edit (pencil) icon.
  5. Maximize Even more ways to pay employee. Then select S-Corp Owner's Insurance.
  6. You can add the Recurring amount. Or leave it blank. You will have the option to enter the S-corp amount when you run payroll.
  7. Select Done.

Option 1: Employee tax loan

If you choose this option, you'll first need to create a fringe adjustment check. Then you'll need to create the employee tax loan.

Create the fringe adjustment check.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Payday. If necessary, also select a pay schedule.
  2. From the Check Type drop-down, select Fringe Adjustment. Then select Go.
  3. Change the Pay date.
  4. Select only employee(s) who need to have S-Corp recorded. Then in the S-Corp Ins. field, enter the dollar amount for S-Corp premiums.
  5. When you're finished, select Create Paycheck.
  6. Select the View/Edit button to review the details of the check before moving on to the next step.
  7. Select Approve Paychecks to submit.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employees.
  2. From the Run Payroll drop-down, select Fringe Benefits only.
  3. Select No, my employee will pay the taxes. Then select Continue.
  4. Change the Pay date.
  5. Select only employee(s) who need to have S-Corp recorded. Then in the S-CORP INS. field, enter the dollar amount for S-Corp Premiums.
  6. Select Preview Payroll. Then review it.
  7. If everything is correct, select Submit payroll. Then select Finish payroll.

The system will automatically create a deduction called "Employee Tax Loan" and assign it to the employee. But it won't actually start deducting until it is set up within the employee profile. Follow the instructions below to set that up.

Set up the Employee Tax Loan

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Employees. Then select the employee name.
  2. In the Deductions & Contributions section, select Edit.
  3. Select Edit next to the Employee Tax Loan deduction.
  4. Enter the Amount per period. You can deduct the full amount from the next paycheck. Or if you like it to come out over the course of several paychecks.
  5. Enter the total amount of the loan into the Annual maximum area.
  6. Select Save.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employees.
  2. Select the Employee's name. Then select Edit employee.
  3. In section 4, select the edit (pencil) icon next to Employee Tax Loan.
  4. Enter the Amount per period. You can deduct the full amount from the next paycheck. Or if you like it to come out over the course of several paychecks.
  5. Enter the total amount of the loan into the Annual maximum area. Then select OK.

Important: Due to the way our system handles the Employee Tax Loan deduction, it won't automatically stop deducting until it has pulled double the amount entered as the Annual maximum. After the loan has been repaid in full, you'll need to go in and manually remove that deduction from the employee profile. You can set up a to-do task reminder to remove that deduction, and the date on which they can do so.

Option 2: Lowering or zeroing out taxes

For this option, you will be lowering or zeroing out taxes.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Payday. If necessary, also select a pay schedule.
  2. From the Check Type drop-down, choose Fringe Adjustment. Then select Go.
  3. Update the Pay Date.
  4. Make sure only the employee(s) who need to have S-Corp recorded are selected. Then in the S-Corp Ins. field enter the dollar amount for S-Corp premiums that need to be recorded. When you're finished, select Create.
  5. Select the blue View/Edit button. Then select the gray Edit button to edit the paycheck
  6. From here, you can lower or zero the federal and state income taxes, according to the customer's wishes. Once you've got those set, check to make sure that the Employee Tax Loan deduction shows a current amount of $0.00. Then select Save. As long as that deduction isn't being used, it will disappear automatically once the paycheck is submitted.
  7. If everything looks correct, select the blue Approve Paychecks button to finish the process.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employees.
  2. From the Run Payroll drop-down, select Fringe Benefits only.
  3. Select No, my employee will pay the taxes. Then select Continue.
  4. Change the Pay date.
  5. Select only employee(s) who need to have S-Corp recorded. Then in the S-Corp Ins. field, enter the dollar amount for S-Corp Premiums.
  6. Select Preview Payroll.
  7. Select the edit (pencil) icon next the Net Amount.
  8. Select the Employee taxes drop-down. Zero out the federal income tax and state income tax.
  9. Select OK to save.
  10. If everything is correct, select Submit payroll. Then select Finish payroll.

Option 3: Company pays taxes

For this option, the company pays for their employees' taxes.

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Payday. If necessary, also select a pay schedule.
  2. From the Check Type drop-down, select Fringe Adjustment. Then select Go.
  3. Update the Pay Date.
  4. Select I will pay the employee's taxes located above the list of employees.
  5. Select only the employee(s) who need to have S-Corp recorded. Then in the S-Corp Ins. field, enter the dollar amount for S-Corp premiums that needs to be recorded. When you're finished, select Create Paycheck.
  6. Select the View/Edit link to review the details of the check before moving on to the next step.
  7. Select Approve Paychecks to finish the process.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employees.
  2. From the Run Payroll drop-down, select Fringe Benefits only.
  3. Select Yes, my business will pay the taxes.
  4. Change the Pay date.
  5. Select only the employee(s) who need to have S-Corp recorded. Then in the S-Corp Ins. field, enter the dollar amount for S-Corp premiums that need to be recorded.
  6. Select Preview payroll. Then review it.
  7. If everything is correct, select Submit payroll. Then select Finish payroll.