Welcome to the Community, @jbonett.
There's currently no option to change the limit type of an employee's deduction. However, I have a workaround that you can consider.
In QuickBooks Desktop, there are three Limit Types when it comes to your employee deductions. These are:
- Annual - Restart each year
- Monthly - Restart each month
- One-time limit
Since your deduction resets annually, you can either edit the payroll item to set a the amount to zero to stop it from deducting. Or you can temporarily deactivate the payroll item every end of December and May, and re-activate it every January and June.
You can edit or deactivate your payroll item from your Payroll Item List. Here's how you can edit the amount:
- From the Payroll Item List, select the deduction.
- Click on Next until the Default rate and limit section.
- Enter the deduction amount intended for each paycheck.
- Click on Finish.
If you want to temporarily deactivate the payroll item, here's how:
- From the Payroll Item List, select the deduction.
- Tick on the Payroll item is inactive box.
- Click on Next until set up is done.
- Click on Finish.
Lastly, to correct your prior paychecks, you can make a payroll correction. Here's how:
- Click on Employees from the menu bar.
- Select Payroll Taxes and Liabilities, then choose Adjust Payroll Liabilities.
- In the Date field, enter the date for which you are making the adjustment. QuickBooks prefills today's date, but you should enter the date that you want the adjustment to be effective.
- In the Effective Date field, enter the date that you want this adjustment to affect your liability balance.
- Choose whether to associate this liability adjustment with the company or a specific employee.
- In the Taxes and Liabilities section, from the Item Name column drop-down, select the correct Payroll Item.
- In the Amount column, enter a positive number to increase the tax owed. And a negative number to reduce the tax owed amount.
- If you have additional employees, select Next Adjustment and repeat the steps for each affected employee. If there are no additional employees, select OK to save your entry.
You may refer to this article for more information: Adjust Payroll Liabilities.
Please let me know if you have any other concerns. I'll be here to help.
