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Active Member

payroll liabilities

As a church with a 501C3 we do not file or pay a 940 tax liability but quickbooks

has just started to require that payment in the pay liabilities of payroll and I cannot 

seem to remove it or change it

This suddenly showed up without me having changed anything in our program

what do i do to remove it

QuickBooks Team

Re: payroll liabilities

Hello there, @jt8.


Thanks for bringing this matter to my attention. I’d be happy to get you pointed in the right direction in determining how to fix the 940 tax liability showing on the Pay Liabilities tab.


This can happen if changes are made to your account. Make sure that Don’t Withhold is still selected on the Filing Status field on your employee’s profile.


If there are no changes made on the setup, I suggest giving our Customer Care Team a call for further assistance. They have the necessary tools capable of pulling up your account in a secure environment and help double check why the 940 tax liability is showing on your end. 


Here’s how to contact support:


For QBO Payroll:
1.    Sign in to your QBO account.
2.    Go to Help at the top right.
3.    Click Contact Us to connect with a live agent.

For QuickBooks Desktop Payroll:
1.    Go to this link
2.    Select your Payroll Subscription.
3.    Choose Payroll.
4.    Click View Contact Info.

That should do it. Please let me know how it goes after contacting them. I’ll keep an eye out for your response. Thanks for dropping by and take care!

Active Member

Re: payroll liabilities


I did check the employees and I found that one employee had the FUTA tax checked so 

I unchecked it but the liabilities are still showing up in the payroll center

any ideas on getting rid of them there? 

I know that as a church we are exempt so I will ignore making payments but I would 

like it to be gone from the screen

Thank you for your help

QuickBooks Team

Re: payroll liabilities

Glad to hear again from you, @jt8.


Allow me to share additional information to make sure you'll not incur any Tax Liability for FUTA tax.


If you're using QuickBooks Online Payroll, make sure to put a check mark on the FUTA Tax exemption in your employee's payroll information. 


If you still see tax liabilities in your Payroll Center, it is possible that you have created paycheck for your employees already. If these are just paper checks, you can delete and recreate the check to have an accurate calculation of your tax liabilities. However, if these are direct deposit checks, I'd recommend contacting our Payroll Support Team. There would be a need to perform payroll adjustment or corrections.


Here's how to contact us:

  1. Go to the Help menu.
  2. Click Contact Us.
  3. Under How can we help?, type in your “Import Customer’s List”.
  4. Hit Continue.
  5. Click Get our phone number to contact us.

On the other hand, if you're using QuickBooks Desktop Payroll, unchecked the FUTA Tax in the employee's Federal Tax information. 



You can also set the FUTA Tax payroll item as inactive so that it will not be included in the calculation of your employees paycheck. Here's how:


  1. Go to the Payroll Item List.
  2. Double-click the item that you created. 
  3. Check the box for Payroll item is inactive box.
  4. Click Next, and then Finish.

If you still see tax liabilities in the Payroll Center, let's create an employee liability adjustment to zero out the FUTA  Tax. Please follow these steps: 

  1. Go to Pay Center.
  2. Choose Payroll Liabilities tab.
  3. Select Other Activities section.
  4. Click Adjust Payroll Liabilities.
  5. Use the paycheck date for both Date and Effective Dates
  6. Choose Employee under Adjustment is for and select the name of the employee.
  7. Select FUTA Tax under the Item Name column.
  8. Enter amount of the tax liability, make sure to put a negative sign on it.
  9. Click OK.

If you need further help with correcting your employee's check, I'd suggest contacting our QuickBooks Desktop Payroll Support Team. A specialist will be able to further assist you via secured remote access session.


Here's how:

  1. Visit:
  2. Choose your QuickBooks Product.
  3. Select your QuickBooks Version.
  4. On the Contact Us page, click a topic.
  5. Click on the Get Phone Number button to see the support number.

Don't hesitate to click the Reply button if you have other questions about correcting your employee's payroll checks. I'm here to help.