Answer--->

Note 1: this solution assumes you have, first, setup the fringe benefit field called, Health Insurance.  Search Sage's knowledge base, key words: how to setup fringe benefits

Note 2:  this solution is specific to California, since California taxes employer paid medical benefits to a 2% shareholder, and thus, is included in taxable wages to the 2% shareholder.

1. Answer
2. In Sage 50 US edition 2021.
3. Click Maintain from the menu bar.
4. Scroll to and click Employees/Sales Reps...
   
5. In *Employee ID: field enter employee id or search from drop-down menu.
6. Click the Employee Fields tab..
7. Under the column title Field Name, go to St_Income, and check the box under column title Use Defaults.
8. If Sage 50 Accounting dialogue box opens with message "A valid account must be selected before continuing." then press ok, and go to the Pay Info tab. (the program may automatically take you to the Pay Info tab.)
9. Under the column title Use Defaults, check all the boxes for each Pay Type---there are 20 boxes that need checked.
10. I asked Sage support staff, why do I need to check 20-boxes to adjust gross taxable wages for State.  Sage Support Staff, said it was related to Tax Service Update:  20210102.
11. This suggested solution was written on 12-21-2020