Thank you for your response. As per IRS, HSA Contribution for >2% shareholder of S-Corp must be included in federal/state wages and reported in W-2 box 1 but not in box 3 &5. As a result, this contribution will be taxable for federal/state income tax but exempted from Payroll taxes (SS/FICA/Medicare).
Also, HSA contribution for >2% shareholder of S-Corp should be reported in box 14 in W-2 and NOT in box 12.
In QBO, I do not see any 'Pay Type' that can help us to record HSA contribution for >2% shareholder of S-Corp correctly to meet IRS requirements.
Any help will be greatly appreciated.
