User Support Forum

Hi,

I just added a payroll benefit to a couple of our church employees. This is not taxed in any way, but it does need to be reported in Box 12 of the W-2. I have the benefit set up in payroll and have successfully added it to the employees. However, when I originally set up the payroll benefit item, there was NO ability to specify the expense account and liability account. This is an item that is paid by the church. What I need is that when I post the weekly payroll, the software automatically posts the amount to the expense account and liability account. Similar to how "employer liabilities" are handled within payroll...but this is a benefit. I would set it up as an employer liability, but then I can't specify the W-2 box.
Is there a way to set up a "Benefit" that is reportable on a W-2 and posts to an expense and liability account?

If not, there really should be, because this is how it needs to be handled. This is for an employer contribution to an employee's Health Savings Account. This needs to go to an expense and liability to be paid out monthly, but also needs to be reported on the employee's W-2 in box 12. It looks like I have to manually enter the expense and liability separate from payroll.

fbcacctg wrote:Hi,

I just added a payroll benefit to a couple of our church employees. This is not taxed in any way, but it does need to be reported in Box 12 of the W-2. I have the benefit set up in payroll and have successfully added it to the employees. However, when I originally set up the payroll benefit item, there was NO ability to specify the expense account and liability account. This is an item that is paid by the church. What I need is that when I post the weekly payroll, the software automatically posts the amount to the expense account and liability account. Similar to how "employer liabilities" are handled within payroll...but this is a benefit. I would set it up as an employer liability, but then I can't specify the W-2 box.
Is there a way to set up a "Benefit" that is reportable on a W-2 and posts to an expense and liability account?

If not, there really should be, because this is how it needs to be handled. This is for an employer contribution to an employee's Health Savings Account. This needs to go to an expense and liability to be paid out monthly, but also needs to be reported on the employee's W-2 in box 12. It looks like I have to manually enter the expense and liability separate from payroll.

Actually, if you're on v11, there is a way to get the expense and liability accounts, but you'll have to manually add the amount in box 12 at the time you print the W-2s. In reality this is less of a bother than having to post a transaction in Funds Accounting to get this done. When you add a new payroll item, just select Employer Liability, it will give you the ability to add the expense and liability items.

And a note to the techs, this may be a good thing to add to the wishlist. You added the code 'W' for Box 12 for employee contributions, but nothing for employer contributions.

The taxable benefit item by design does not post any information over to accounting. It was originally added for life insurance in excess of 50,000 paid by the employer. For this there is not an entry that should be carried over to accounting because the amount is a calculation based on a formula by the IRS.

The best way to handle employer contributions to an HSA is to use the taxable benefit and leave all the taxes unchecked. In accounts payable when you make the contribution just credit bank and debit the expense account. If you really want to show a liability, you will have to make a journal transaction outside of payroll to record the amount.

Jeff wrote: The best way to handle employer contributions to an HSA is to use the taxable benefit and leave all the taxes unchecked. In accounts payable when you make the contribution just credit bank and debit the expense account. If you really want to show a liability, you will have to make a journal transaction outside of payroll to record the amount.

Jeff, I was looking at that but discarded that approach because it appeared (to me, at least) that she really wanted something that took care of the transaction entries, and I figured manually adding the W-2 once a year would be preferable to having to create a transaction 2 or 4 times a month.