Overview

This article explains how to set up employer and employee contributions to HSA plans.

A health savings account (HSA) is money (pretax or taxable) that an employee can use for out-of-pocket medical expenses. An employee is eligible to set up an HSA if they satisfy all federal requirements, such as participating in a High Deductible Health Plan (HDHP).

Details

Important: Employers are responsible for determining an employee's eligibility and annual maximum for HSA contributions. Intuit does not automatically limit HSA annual maximum amounts, because HSA plans vary widely. Both the employer and the employee can contribute to the HSA. The contributions limits for 2016, 2017, 2018, and 2019 are as follows:

  • The maximum annual HSA contribution for an eligible individual with self-only coverage is $3,350 for 2016, $3,400 for 2017,  $3,450 for 2018, and 3500 for 2019.
  • For family coverage, the maximum annual HSA contribution is $6,750 for 2016-2017, $6,900 for 2018 and 7000 for 2019.
  • The catch-up contribution for individuals who are 55 or older is $1,000 for 2009 and all years going forward.
  • Individuals eligible on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch-up contribution, if 55 or older by year end), regardless of the number of months they were eligible during the year. For individuals not eligible on that date, both the HSA contribution and catch-up contribution apply pro rata based on the number of months the taxpayer was an eligible individual during the year.

To set up employee HSA contributions (deducted from employee's paychecks)

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Employees, then select the employee's name.
  2. In the Deductions & Contributions section, select Edit
  3. Add a Deduction in Deductions for Benefits.
  4. Select New Deduction
  5. In the Category drop-down, select HSA plans.
  6. In the Type drop-down, select either Pretax HSA or Taxable HSA.
  7. Add a Description and Amount per period.
  8. Select Save > OK.

QuickBooks Online Payroll

  1. Select Workers from the left pane menu.
  2. Select Employees.
  3. Select the employee's name.
  4. Select the edit (pencil) icon beside Pay.
  5. In section 4, select edit (pencil) icon.
  6. Select Deduction/contribution > New deductions/contribution > HSA Plans.
  7. Select either Pretax HSA or Taxable HSA.
  8. Add a Description and Amount per period.
  9. Select OK.

To set up company (employer) HSA contribution:

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. Under What additional ways do you pay employee?, select Show all pay types.
  4. Select Company HSA Contribution, then enter the amount. (If the amount varies, leave the box blank; you'll enter it when running
  5. Select OK.

QuickBooks Online Payroll

  1. Select Workers from the left menu.
  2. Select Employees.
  3. Select the employee's name.
  4. Select the edit (pencil) icon beside Pay.
  5. In section 3, select edit (pencil) icon.
  6. Expand the section that says Even more ways to pay..
  7. Select Company HSA Contribution.
  8. Select Done.

About HSA contributions and W-2 forms

  • If the employee has both an employee-deducted and company-contributed HSA, Box 12 on Form W-2 shows the total of the two amounts.
  • On W-2 forms, your contributions to an employee's HSA are reported in Box 12 but excluded from federal wages and most state wages. The total company HSA contribution for the year is reported in box 12 of the employee's W-2 with code W.
  • If your contributions are taxable at the state or local level, we include the amount in taxable state wages or local wages.
  • The company HSA contribution amount isn't added to the employee's net pay. Employers are responsible for depositing the contribution with the HSA provider.

Related Articles