HRA or as we say QSEHRA is an acronym for a Qualified small employer health reimbursement arrangement. It is also called a small business HRA.  The QSEHRA is a health coverage subsidy plan for businesses with fewer than 50 employees. It is a tax-free benefit for the employees and tax-deductible for the employers.

Through this arrangement, the company reimburses the employees for their health care-related cost up to a maximum limit amount each year. For Qualifying for QSEHRA purpose a company as mentioned earlier as well must have less than 50 employees and should not own any group health plan.

Steps to Guide you in setting up HRA in QuickBooks

We have ensured to include all the steps to guide you through the process of setting up the HRA in QuickBooks. So, in case you are looking to set up QSEHRA then you can follow the below steps to do the same:

Total Time: 4 minutes

  1. Step One

    First of all, you will have to click on Employees on the top menu bar and then click Manage payroll items > and click on New Payroll item.

  2. Step Two

    In this step, you need to choose the Custom set up and then click on Next.

  3. Step Three

    After step 2, you have to click on company contribution and click on Next. Now enter a unique name for the payroll item and click on Next. The name will appear on pay stubs; employee pay vouchers.

  4. Step Four

    Now you need to leave the agency information as blank and click on Add New against the liability box.

  5. Step Five

    Now in the Add New screen, click the Other Expense account arrow and choose the account just created. After this, you will have to click on yes to ignore the warning that the expense and liability account has been created to the same account.

  6. Step Six

    After this select the Tax tracking type and click on the new tax-tracking type and select Qual. Small ER HRA and click on Next.

  7. Step Seven

    At last click on Next twice in a row, and then click on Finish. You will have to accept the default settings on the default rate and limit page for completing the process of setting up the HRA in QuickBooks.

In case you are creating more than one payroll item to track the Qualified small health arrangement then setting both the expense and liability account to the same account will create a “Wash item” which will show zero amount on profit and loss account which will help you in tracking the QSEHRA payment in case of workday -2 reporting without numbers affecting the financial report.

Need Professional Support?

The above steps will allow and help you in tracking and reporting the amount of HRA payment and reimbursement which you make to the employee as an employer annually under the QSEHRA plan. If you still face any issues or queries at your end and are unable to resolve those issues at your end or you want to have any further information at any point, you can dial a toll-free number smbaccountants.com and the QB technical helpdesk will help you.


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