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hadanaoki
Level 1

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

 
Solved
Best answer January 12, 2020

Best Answers
MaryAnn_E
QuickBooks Team

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Hello @hadanaoki,

 

Let's check the Box 4's total amount, and look at the paycheck of your employees. Please follow the steps below to locate the entries that need to be corrected.

 

Here's how:

  1. Run your Payroll Summary report for the entire calendar year.
  2. The amount for Social Security Employee will be equal to the number in this box.
  3. Double click the amount to see what transactions contribute to the total.

 

Once you find the incorrect entries, you can create a liability adjustment to fix it.

 

You can also check this article for more details on how to e-file w-2 forms: E-file Federal W-2 Forms

 

If you have any other related concerns, feel free to post on the comment section below. We're here to help.

 

View solution in original post

11 Comments 11
MaryAnn_E
QuickBooks Team

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Hello @hadanaoki,

 

Let's check the Box 4's total amount, and look at the paycheck of your employees. Please follow the steps below to locate the entries that need to be corrected.

 

Here's how:

  1. Run your Payroll Summary report for the entire calendar year.
  2. The amount for Social Security Employee will be equal to the number in this box.
  3. Double click the amount to see what transactions contribute to the total.

 

Once you find the incorrect entries, you can create a liability adjustment to fix it.

 

You can also check this article for more details on how to e-file w-2 forms: E-file Federal W-2 Forms

 

If you have any other related concerns, feel free to post on the comment section below. We're here to help.

 

View solution in original post

hadanaoki
Level 1

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Hi Mary Ann,

Thank you very much for the help.

I got your team help earlier and did exactly same things as you wrote.

Thank you very much.

 

Watersview
Level 1

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

I need additional help - I only withheld the amount listed on the W-2 because my employees have tips and sometimes I cannot withhold the total amount.  I listed the difference in box 12 Code A for uncollected social security on tips.  However, this has not resolved the issue and I'm unable to e-file.  Please advise.

Kristine Mae
Moderator

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

I'd like to provide how QuickBooks populates this line, Waterview.

 

Box 12 consists of cash tips or paycheck tips. They are taxable and need to be withheld. 

 

QuickBooks recognized that the social security amount is incorrect. The reason why you're still unable to file the W-2 form.

 

You'll have to create an adjustment for the Social Security tax (both company and employee) to correct it. I'll share the article on how you can adjust payroll liabilities in QuickBooks Desktop for the detailed steps. 

 

Once done, you can try to e-file the form again.

 

I'll also include the article about W-2 form boxes explained for better guidance. 

 

If you need more help, please don't hesitate to get back to this thread. 

Watersview
Level 1

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

I appreciate your help.  However, my issue is that I didn't withhold the amount calculated for SS & Medicare because the employee's wages were primarily cash tips, thus not giving me the funds to withhold from.  The emplyee no longer works for us and if I make the adjustments according to the links you provided, it creates a change to what I owe the govt, which I was unable to collect from the employee.  I need the lower SS and Medicare amounts to remain, however, I need the difference to be reflected in Box 12 of the W-2.  This doesn't seem possible in Quickbooks?????

GlinetteC
Moderator

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Thanks for elaborating on your concern, Watersview.

 

This isn't possible since it's a rule from the IRS or SSA where someone has to pay the amount to avoid being penalized.

 

I'd also recommend reaching out to them so you can verify what needs to be done especially the employee is no longer working in your company.

 

If you need tips and related articles about payroll and taxes, you can visit our QuickBooks Community Help website for your future reference.

 

You can always get back into this thread if need more help.

BigRedConsulting
Community Champion

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

RE: However, my issue is that I didn't withhold the amount calculated for SS & Medicare because the employee's wages were primarily cash tips, thus not giving me the funds to withhold from.

 

In this case you should have reduced federal withholding and not SS or Medicare or any other straight line tax, per the instructions.

 

Or, another method is to hold back some of the tips and use them to cover the taxes, so your tips in and tips out items will be different, as some of the tips are used to pay the taxes.

 

Or, another method is to use a net addition item on the check to bring it up to 0.00 to cover the taxes.  This item should, in turn, should use an asset account that represents a loan to the employee.  You can either collect that loan on payday in cash, or let it ride, which can be appropriate if this is an unusual event.  In this latter case, then use a similarly-coded net item, but a deduction, on a future check to pay back the loan.

Watersview
Level 1

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

I did reduce the Federal and State withholdings to zero, plus I had to reduce the SS and Medicare taxes because the server made so much in tips that the hourly rate didn't cover the taxes on tips.  This occurred her last week of work so I couldn't recoop.  She was a summer only employee.  According to IRS, if the money can't be deducted by the 10th of the following month, we're permitted to let it go. 

BigRedConsulting
Community Champion

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

RE: I did reduce the Federal and State withholdings to zero, plus I had to reduce the SS and Medicare taxes because the server made so much in tips that the hourly rate didn't cover the taxes on tips. 

 

Still, doing this will always result in an error, so you should in the future use a different method as noted above.

cindy lucy
Level 2

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Payroll is turned to Auto.

The pay check dated 11/26/2021 zeroed out.

The Gross Wage is 3333.33

State, Local and Federal taxes were correctly.

The social security and Medicare tax withheld were NOT calculating correctly.  Below are the calculation for a Gross Payroll of $3333.33.  Intuit was notified with no resolve.  Help.  

Social Security$1,446.67
Medicare$338.34
JenoP
QuickBooks Team

Cannot eFile W2/W3 with error: Box 4 Social security withholding is smaller than calcurated from Box 3 plus Box 7 wages. Please check your entries and make corrections.

Hi there, Cindy.

 

I just want to verify with you if the paycheck date is fir next year or you meant to say November 26, 2020? 

 

If the date is for this year, it's possible that there are past payroll transactions that are causing the incorrect calculation. The program has an auto-correct feature. If the system detects that a calculation for a tax with a fix rate is incorrect, it will try catch up or give you the year-to-fate amount when creating a paycheck. 

 

You can run a Payroll Detail report to check if there's a paycheck or a liability that's prompting QuickBooks to auto-correct the amount. Here's how:

 

  1. Go to the Reports menu, scroll-down to Employees and Payroll, and then click Payroll Detail Review.
  2. Click Customize Report.
  3. Change the Dates to This Calendar Year.
  4. Proceed to the Filters tab and Select Payroll Item.
  5. Click the drop-down list and select Social Security or Medicare.
  6. As you can see, there's a column for Payroll Tax Rate, Calculated Amount, and Amount Difference.
  7. Review the details under this column if there's an entry that's causing the issue. Usually, the amount is different in the Calculated Amount and Amount Difference.

Once you're able to figure out the transactions that are causing the incorrect calculation, you'll need to either edit them or create a liability adjustment. Let me share these articles with on how to do these processes:

 

Let me know if you need anything else.

 

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