Learn how to set up 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. We'll explain contribution regulations. And show you how to set it up in Online Payroll.

Determine contributions

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 contribution limits for 2019 are as follows:

  • The maximum annual HSA contribution for an eligible individual with self-only coverage is $3500 for 2019.
  • For family coverage, the maximum annual HSA contribution is $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). That's 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 eligible during the year.

Set up employee HSA contributions

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Select Employees, then the employee's name.
  2. In the Deductions & Contributions section, select Edit.
  3. Enter in 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 then OK.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employee.

  2. Select the employee's name.
  3. Select the edit (pencil) icon beside Pay.
  4. In section 4, select edit (pencil) icon.
  5. Select Deduction/contribution, then New deductions/contribution, then HSA Plans.
  6. Select either Pretax HSA or Taxable HSA.
  7. Add a Description and Amount per period.
  8. Select Ok.

Set up 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 payroll.)
  5. Select Ok.

QuickBooks Online Payroll

  1. From the left menu, select Workers, then Employee.

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

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.