Payroll

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

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eddiewaren
Posts: 9
Joined: Mon Jan 21, 2019 12:26 pm

Payroll

Post by eddiewaren »

Our Pastor puts $3,000 per year into his HSA from his salary and the church also sends $3,000 directly to his HSA account. How do we show this on the W2 and how should we show this for 2019? Thanks.

Matt
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Re: Payroll

Post by Matt »

The $3,000 paid by the church needs to be reported in box 12 on his W-2 with a code W. The $3,000 paid by your pastor is included as part of the wages paid in box 1 on his W-2, unless this was paid using a cafeteria plan. If the latter, this $3,000 would be combined with the $3,000 paid by the church and reported in box 12 with code W for $6,000.

eddiewaren
Posts: 9
Joined: Mon Jan 21, 2019 12:26 pm

Re: Payroll

Post by eddiewaren »

Thanks Matt. When we printed his W2 only one portion showed up. Do we just manually adjust the W2? How do we get them both on the W2 for 2019? Thanks again.

Matt
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Re: Payroll

Post by Matt »

I assume the portion that showed up was the deduction from his salary. If so, to get the portion paid by the church to show up too you'll need to create a Taxable Benefit Pay Item. Select W from the Box 12 drop down. On the "Benefit is Taxable by Which Taxes" Box do NOT select any of the taxes (e.g. Federal, State, Social Security, Medicare). Once the Taxable Benefit Pay Item is set up you'll need to process the payroll and process just this pay item for $3,000.00, then post the payroll. The payroll will need to be processed with a 2018 date in order for it to show up in box 12 on his W-2.

For 2019, when the church pays their portion you'll need to do the same i.e. process the payroll with this pay item included for the amount that was paid.

eddiewaren
Posts: 9
Joined: Mon Jan 21, 2019 12:26 pm

Re: Payroll

Post by eddiewaren »

Thanks. We are very new to this program- how (and where) exactly do we do that?

NeilZ
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Location: Dexter NM
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Re: Payroll

Post by NeilZ »

eddiewaren wrote:Thanks. We are very new to this program- how (and where) exactly do we do that?
That's easy:

In Payroll:
1. Go to Maintain Item Description, click on ADD
2. Select Taxable Benefit from the list of items displayed
3. Enter an item number, description, and for the box 12 code "W" from the pull down list.
4. Go to Maintain List of Employees and on the Pay Item tab, click on the ADD button. You'll see the new Item Description listed under the TAXABLE BENEFITS list. Select it then click on NEXT, which brings up the next window. On this window you'll enter the amount the congregation is contributing to the HSA each payday. Click OK and you're done.


To process the 2018 contribution, you would process payroll for the period 12/31/2018 thru 12/31/2018. Check the box on the process payroll screen to suppress specific items. Going through the process, only select the employee you need to correct from the list of employees that appear. On the Process Items screen uncheck every item EXCEPT the HSA taxable benefit. On the Verify Payroll screen, DOUBLE CLICK on the employee and change the amount listed on the HSA Contribution from the per payroll amount to 3,000.00. Remember, you're doing this so the W-2 for 2018 will be corrected filled in.

Then click the OK button, which will return you to the Verify Payroll. Click on FINISH, the system will probably say you are going to process a payroll with no funds or something to that effect, and show the employee line setup for Manual Check. That's OK .. just enter ADJ W-2 as the check number, and click on Finish.

The W-2 will now reflect the proper amount.

I DO advise that you do a Powerchurch Backup of the ACCOUNTING database before you start so you can revert back if the process did not work properly.

Hope this helps.
Neil Zampella

Using PC+ since 1999.

lakingery
Posts: 3
Joined: Thu Feb 14, 2019 4:17 pm

Re: Payroll

Post by lakingery »

I also have a question regarding this..... The payment for our employee's HSA was made directly to the financial institution.. do I still process this through payroll following the steps you have listed so that it shows up in box 12 W ???

NeilZ
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Re: Payroll

Post by NeilZ »

lakingery wrote:I also have a question regarding this..... The payment for our employee's HSA was made directly to the financial institution.. do I still process this through payroll following the steps you have listed so that it shows up in box 12 W ???
Again, the steps listed are for the employer contribution, it doesn't matter if you give it to the employee to pay or you do it, the steps listed will properly show the employer contribution in step 12-W.
Neil Zampella

Using PC+ since 1999.

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