how do you categorize employer contributions to HSA accounts?

The HSA benefit contribution made each pay period is *not* a payroll deduction subject to tax.

The amount is automatically added to an HSA custodial account which I have to track it. it is not a part of gross pay or net pay. it's separate. Therefore I can't add it in split TRX window.

Is it part of cashflow?
Is it part of banking summary, (which shows transfers to/from account?
It is "cash"-- but. . .it doesn't come from my cash account.

Any help on this would be wonderful.
Thank you
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Best Answer

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Answer ✓
    I suggest you enter the employer contribution as an earnings entry on the paycheck reminder with a non-taxed category and use a pre-tax entry to transfer the contribution to the HSA account.

Answers

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Answer ✓
    I suggest you enter the employer contribution as an earnings entry on the paycheck reminder with a non-taxed category and use a pre-tax entry to transfer the contribution to the HSA account.
  • Damian
    Damian Member ✭✭✭✭
    Why not just set up a category "Employer HSA Contribution", then set up a recurring transaction to post directly to your HSA account with the same frequency as your paycheck?  It is cash flow, but not from you, but your employer.  If your HSA provider allows for it, you can set it up in Quicken to download transactions automatically.  
    (Quicken Premier Subscription R40.21 on Windows 11 Pro)
  • Elaine2
    Elaine2 Member ✭✭✭
    Thank you Damian for this input.

    First-- let me say that I posted this question late in the day yesterday. Not a good time to think through gnarly accounting issue.

    Second. :-) I've done all of the above. Having restated it for me, I think I need to change the category from an expense (ie to savings) to Income-- because it is a contribution from another source.  I'll try that approach and see if that solves the issue.

    The issue-- became apparent when the contribution was showing up as a negative in the expense (outflow) which signaled to me that something wasn't right.

    Thank you again for this feedback. -- Elaine
  • Elaine2
    Elaine2 Member ✭✭✭
    Thank you Sherlock.

    I will attempt to configure these trx as you suggest.  Just now learning about taxable and non-taxable items and how to categorize them.

    Excellent suggestion. 

    Elaine.
  • Damian
    Damian Member ✭✭✭✭
    edited May 10
    @Elaine2 - you are very welcome.  Yes, the category should be coded as income.  It would be just a deposit to your HSA, because it's not being transferred from your paycheck, or any of your other accounts.
    (Quicken Premier Subscription R40.21 on Windows 11 Pro)