Adjust Payroll Liabilities

QuickBooks uses the Effective Date to calculate amounts and payroll liability balances, UW Fan. 

Payroll liability adjustments are made year by year and uses the effective date you'll want the adjustment to affect your liability balance. 

Once we open the Payroll Liability Adjustment window, the dates are set to today's date. It's possible that it wasn't modified that's why it affected the current payroll. 

We can get back to it and change the date so QuickBooks will retroactively correct the adjustments. Let me show you how: 

1. Go to the Employees menu. 
2. Choose Payroll Taxes and Liabilities.
3. Select Adjust Payroll Liabilities. 
4. Click the Prev Adjustment button to look for the adjustment you created. 
5. Modify the Effective Date.
6. Click OK. 

Let's run the Payroll liability balances report to review the adjustments. 

I'm here if you need anything else. 

Catherine, thank you. I probably did not think about the effective date, but let me ask you one step further in my problem. For example, I have an incorrect state withholding amount in my payroll liability account, say in the $5,000 range. It goes back well in time, probably to old system in 2016 before we converted to QB on January 1, 2017. So I simply want to adjust that incorrect balance. Can I simply date the Payroll Liability Adjustment (I think it would be a negative to eliminate the current credit balance in the account) January, 2019 and be done with it? The amounts are not material to our financial statements. Many people involved over time no longer here and just want to get the payroll liability balances correct. I appreciate your help very much! UW Fan

Let me share additional details, UW Fan.

Ideally, your payroll liabilities will show up once you've entered your previous payroll details from your old system to QuickBooks. If you've paid it, we can record a prior tax payment to offset it. This can be the reason why there's an incorrect payroll liability.

You can follow these steps on how to record a historical tax payments:

1. Go to Help menu and select About QuickBooks.
2. Press Ctrl + Alt + Y or Ctrl + Shift + Yon your keyboard. This will open the Setup YTD Amounts window.
3. Click on Next until you see the Enter prior payments window.
4. Hit the Create Payment button. Enter the Payment Date and For Period Ending date .
5. Select the tax item ( Incorrect Payroll Liability). Enter the amount.
6. Click Done and Finish.

You also have an option for it not to affect your accounts. This is applicable if your accounts have correct balances. Just click on Accounts Affected button and select Do not affect accounts. This option is also applicable to creating a payroll liability adjustments.

Check these articles to learn more:

• Adjust payroll liabilities in QuickBooks Desktop

• Enter historical tax payments in Desktop payroll

I'm always available if you need anything else.