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Debits

Introduction​

Reporting employer-sponsored health insurance on Form W-2 is a requirement under the Affordable Care Act (ACA). This guide explains how to use QuickBooks to report the cost of coverage under an employer-sponsored group health plan.

Importance of Reporting Health Insurance on W-2s​

The inclusion of the cost of health insurance on W-2 forms allows employees to see the value of their health care benefits provided by their employer. This information is reported in Box 12 with the code DD to distinguish it from taxable income.

Preparing to Report Health Insurance on W-2s​

Before proceeding with reporting on QuickBooks, ensure that all employee health insurance payment records are up-to-date and accurate.

Steps for Preparation​

  1. Verify Coverage Details: Confirm the health insurance coverage information for each employee, including the type of plan and the cost of coverage.
  2. Update Employee Information: Make sure all employee information in QuickBooks is current and correct.

Reporting Health Insurance on W-2s in QuickBooks​

Follow these steps to report employer-sponsored health insurance on your employees’ W-2 forms using QuickBooks.

Step-by-Step Instructions​

  1. Open QuickBooks: Start by launching your QuickBooks software.
  2. Navigate to Payroll Tax Forms: Go to the 'Employees' menu, then select 'Payroll Tax Forms' and 'W-2s'.
  3. Choose to Process W-2s: Select the option to process and file W-2s. QuickBooks will guide you through the steps to generate the forms.
  4. Enter Health Insurance Information: When you reach the section for health insurance reporting, enter the total cost of coverage provided to each employee. This information should be entered in Box 12 with the code DD.
  5. Review Forms: Carefully review the W-2 forms to ensure that all information is accurately reported, especially the health insurance cost.
  6. Submit W-2 Forms: After verifying the information, proceed to print and distribute the W-2 forms to your employees and file them with the IRS.

Tips for Accurate Reporting​

  • Keep Detailed Records: Maintain detailed records of all health insurance payments and employee contributions to ensure accurate reporting.
  • Stay Updated on ACA Guidelines: Keep up-to-date with any changes in reporting requirements under the ACA to ensure compliance.
  • Use Latest QuickBooks Version: Always use the most current version of QuickBooks to take advantage of the latest features and updates for tax reporting.

Conclusion​

Reporting the cost of employer-sponsored health insurance on W-2 forms is an important aspect of payroll processing in QuickBooks. By following these steps, you can ensure that your business complies with ACA requirements and provides valuable information to your employees about their health benefits. Regular updates and careful record-keeping are key to making this process as efficient as possible.