Thank you for your response once again.

You and I are on the same page as you did mention that "For shareholder-employees who own 2% or more of an S Corporation, do not select Company HSA contribution. Your contributions are taxable at the federal level and in some states".

However, you suggested to set up 'S Corp item instead of HSA Contribution'.Please suggest how to setup 'S Corp Item' to handle HSA contribution.

Thanks in advance!