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Intuit

SUI Out of Balance page appears when trying to pay FUTA taxes and file Form 940

Overview

You are trying to pay Federal Unemployment Tax Act (FUTA) taxes and file Form 940. However, you see a message stating that your state unemployment insurance (SUI) taxes are out of balance.
This happens because you did not record all your SUI tax payments. You must pay SUI taxes before you pay FUTA taxes or file Form 940. If you do make all required SUI payments on time, you're entitled to a credit on your FUTA taxes. For most businesses, the credit is 5.4%. This reduces the effective FUTA rate to 0.6% (6.0% - 5.4% = 0.6%)

For more information on the relationship between SUI and FUTA, refer to the section Credit for a State Unemployment Tax Paid to a State Unemployment Fund in the IRS Instructions for Form 940.

Details

Account on Enhanced service level

If your SUI tax payments don't exactly match your liabilities, you might see the following screen when you try to pay your FUTA taxes and file Form 940.

What causes this screen to appear?

This normally won't occur when your Online Payroll account is on the Enhanced service level, since we prompt you to make your SUI tax payment and form filing at the end of each quarter. However, there are some situations that will cause the screen to appear:

  • You overlooked our prompt to pay SUI tax for one or more quarters.
  • You changed your SUI rate during the year, and didn't record payments for the additional liabilities.
  • You entered pay history (prior payrolls), and didn't record historical SUI payments for all or part of the historical period.
  • You upgraded your service level from Basic to Enhanced during the year, but didn't record all SUI payments while on Basic.

To resolve the problem:

  1. Click Taxes & Forms.
  2. Click Pay Taxes.
  3. Create and approve any outstanding SUI payments for current year. If the period missing the SUI payment is historical, use the "Enter and Reconcile" link to enter the historical SUI payment.
  4. Click To Do.
  5. Click on the items to pay your FUTA taxes and file Form 940.

Account on Basic service level

When you don't record all your SUI tax payments, a screen similar to the following will appear when you try to pay FUTA taxes and file Form 940:

What causes this screen to appear?

Since your account is on the Basic service level, you make your SUI tax payments and form filings outside of our system. When you make a SUI payment, you should record it in your payroll account. The following situations can cause the SUI Out of Balance screen to appear:
  • You didn't record SUI tax payments for one or more quarters.
  • You changed your SUI rate during the year, and didn't record payments for the additional liabilities.
  • You entered pay history (prior payrolls), and didn't record historical SUI payments for all or part of the historical period.

To resolve the problem:

  1. If the liability listed is incorrect, verify that your SUI rate is entered correctly. Follow these instructions if you need to update your SUI rate.
  2. Click the Enter total SUI taxes paid link and enter the lump amount paid for SUI in the current year.
    • Note: If any employee is exempt from SUI, you cannot do this. The amount entered must match the amount displayed as the liability.
  3. Alternatively, to enter SUI payments one at a time for each quarter:
    • Click the Enter tax payments you have made link.
    • The total amount entered as paid must match the liability listed under Tax Amount.

 

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