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mjuby
Level 2

Create W-2's for household employee when one is below federal minimum

I have a household employer with four household employees. One of them earned less than $2200, so no W-2 is required. I still want to keep the employee in QuickBooks for unemployment tax purposes. When I try to create W-2's, QuickBooks gives me error messages on the employee and won't let me proceed with filing the forms. How do I remove the exempt employee and prepare W-2's for the other three?

Here is an example of the QB error message:
Form W-2 Worksheet (LNAME, FNAME): Box 3 - Social security wages plus social security tips are less than the yearly minimum of $2200 to be covered by household employers. Please check your entries and make corrections.

Solved
Best answer December 31, 2020

Best Answers
AlcaeusF
Moderator

Create W-2's for household employee when one is below federal minimum

Hi there, @mjuby.

 

Welcome to the Community. I'm here to help you create W-2s in QuickBooks Desktop.

 

You can mark the employee as inactive to create W-2s for the three employees. It'll not delete any existing paychecks from the system, and the option to reactive the profile is available for unemployment tax purposes.

 

Here's how:

 

  1. Click the Employees tab at the top menu bar.
  2. Select Employee Center.
  3. Double-click the employee name.
  4. Put a checkmark on the box beside Employee is inactive
  5. Hit OK.

Once done, please run the form. You should be able to access it without the error message.
 

I've also attached some articles you can use to learn more about filing W-2 forms, as well as some answers to frequently asked questions:

 

Keep us posted if you need anything else regarding running payroll forms in QuickBooks. Have a great day.

View solution in original post

10 Comments
AlcaeusF
Moderator

Create W-2's for household employee when one is below federal minimum

Hi there, @mjuby.

 

Welcome to the Community. I'm here to help you create W-2s in QuickBooks Desktop.

 

You can mark the employee as inactive to create W-2s for the three employees. It'll not delete any existing paychecks from the system, and the option to reactive the profile is available for unemployment tax purposes.

 

Here's how:

 

  1. Click the Employees tab at the top menu bar.
  2. Select Employee Center.
  3. Double-click the employee name.
  4. Put a checkmark on the box beside Employee is inactive
  5. Hit OK.

Once done, please run the form. You should be able to access it without the error message.
 

I've also attached some articles you can use to learn more about filing W-2 forms, as well as some answers to frequently asked questions:

 

Keep us posted if you need anything else regarding running payroll forms in QuickBooks. Have a great day.

View solution in original post

mjuby
Level 2

Create W-2's for household employee when one is below federal minimum

Your recommendation to set the employee as inactive made sense, but it didn't work. I have marked the employee as inactive and they no longer show up as an active employee, but when I go to create the W-2s the inactive employee still shows up as an employee to be included. The error message is also still active.

MaryLandT
QuickBooks Team

Create W-2's for household employee when one is below federal minimum

Allow me to step in and provide additional information about making an employee inactive, mjuby.

 

The data of the employee remains on your QuickBooks company file though the status is inactive. You still need to file annual payroll forms since you've created a paycheck for the household employee.

 

You can keep the W-2 for the household employee who doesn't require the form for your own record. On the other hand, you can make the employee active again if you still have to create a paycheck moving forward.

 

Here are the steps to do so:

 

  1. Go to the Payroll tab and then click Employees.
  2. From the Active Employees drop-down, select Inactive Employees.
  3. Select the inactive employee and go to the Employment.
  4. Change the status to Active.

I've added some articles you can check about payroll:

Let me know if you need additional information by commenting below. I'll be right here to help you.

mjuby
Level 2

Create W-2's for household employee when one is below federal minimum

If I follow your suggestions I am able to send the paper W-2's to the eligible employees. However, QuickBooks will not allow me to electronically file the forms. In addition, the W-3 created will be incorrect, since it will still include information from the inactive employees.

GlinetteC
Moderator

Create W-2's for household employee when one is below federal minimum

Hello, mjuby. I'm here to help you redirect to the right support available.

 

Our Payroll support Team will be your number one resource to ensure your payroll concerns are addressed. I'd recommend reaching out to them. They have the tools to take a look into your account and can sort this out for you.

 

Here's how to reach out to them:

 

  1. Go to Help.
  2. Select QuickBooks Desktop Help.
  3. Click on Contact Us.
  4. Select Search for something else.
  5. Enter W-2's for a household employee
  6.  in the Tell us more about your question: field.
  7. Click Start a Message.

If you have any other additional employee concerns, just post them here. I'll be glad to assist you.

CPA2020
Level 1

Create W-2's for household employee when one is below federal minimum

I'm having the same problem so let me know if there is a fix.  The making employee inactive makes no sense, you can make terminated employees inactive all the time and they still get a W-2. 

ChristieAnn
QuickBooks Team

Create W-2's for household employee when one is below federal minimum

Hi there, CPA2020.

 

For now, the steps provided by my colleague AlcaeusF to inactivate the employee is the workaround to use so you're able to properly record W-2s. You'll also have the option to contact our QuickBooks Support Team. They can check your account to help find another alternative way on how to properly make a W-2. 

 

Here's how:

 

  1. Press F1 to open the Help window.
  2. From the search icon, type Contact Support.
  3. Click Contact us at the bottom part.
  4. Give a brief description of your issue about W2and click the Search button.
  5. You'll be routed with How to connect with a QuickBooks expert and you choose which one is best for you.

 

Please refer to this article to see different information about W-2 and how to fix this once your employee finds a mistake on their W-2: Get answers to your W-2 questions.

 

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

mjuby
Level 2

Create W-2's for household employee when one is below federal minimum

I contacted the QuickBooks Support Team. We spent about an hour on the issue, including sharing my screen. They suggested manual preparation of the W-3 and paper filing the returns as a workaround, which was obviously not what I was looking for. I was advised to watch for program updates that might fix the problem. I was told that this was the first time the issue had been reported, so I'm not sure how motivated they are to fix it. 

BigRedConsulting
Community Champion

Create W-2's for household employee when one is below federal minimum

When creating the W-2's you'll see a list of employees and you can de-select this employee.  When you do that then they won't get a W-2 and their data won't be included on the W-3.

mjuby
Level 2

Create W-2's for household employee when one is below federal minimum

De-selecting the employee was one of the options I originally attempted. This does not remove the error and does not allow the electronic filing of the returns. It does allow for the paper filing, as the W-2s and W-3 will print correctly, but I would certainly prefer to electronically file the returns through QuickBooks.

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