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Experienced Member

Tax Liabilities

After adding a new employee, I initially (for about 2 pay periods) forgot to enter 2 local taxes as part of her tax liability.  I performed "create payroll liabilities" at which time I discovered the check that was created did not cover the amount owed.  I then adjusted the check to be the correct amount and then QuickBooks put a negative value in the Liabilities area.  How do I eliminate the negative values that I see when looking at the liabilities owed for the quarter?  I guess I  can do it with journal entries but not being an accountant, I'm not sure of the specifics.  


Any help would be appreciated.

1 Comment
Community Manager

Re: Tax Liabilities

Hello mljb01,


Adjusting payroll liability is the best option we have to remove the negative amount. We do this to correct the employee's Year-to-Date totals. Here's how:

  1. Go to the Employees menu.
  2. Select Payroll Taxes and Liabilities.
  3. Choose Adjust Payroll Liabilities.
  4. Select the employee.
  5. Choose the payroll item (local tax).
  6. Enter the (positive) amount. 
  7. Click on Accounts Affected and choose Affect liability and expense accounts.
  8. Click on OK.

Run the Payroll Summary Report again. 


You're always welcome to post more questions. Have a great day!