FUTA Liabilities

GladeBaptist · ‎April 25, 2022

quickbooks desktop somehow added futa tax to two employees, so now it shows that i owe that tax. i fixed the employees, but the tax is still showing due. how do i get rid of it? (we are exempt from this tax)

LeizylM · ‎April 25, 2022

I appreciate you for reaching out to us here in the Community., GladeBaptist.

Allow me to chime in and help you further with fixing the payroll liabilities in QuickBooks Desktop.

You can create a negative liability adjustment to offset the Federal Unemployment tax liability.

Here's how:

Click on Employees at the top.
Select on Payroll Taxes and Liabilities.
Click on Adjust Payroll Liabilities.
Select the correct Effective Date.
In the Taxes and Liabilities section, click the Payroll Item column and select the correct payroll item.
Enter the negative amount of the adjustment.
Click Accounts Affected and choose Do not affect accounts.
If you have additional employees, click Next Adjustment and repeat the steps for each affected employee.

To know more about the process, please check out this article: Adjust payroll liabilities.

Feel free to check out the following materials below for additional reference:

You can add any details below if you need further assistance with payroll taxes. We're always here to guide and assist you.

View solution in original post

LeizylM · ‎April 25, 2022

I appreciate you for reaching out to us here in the Community., GladeBaptist.

Allow me to chime in and help you further with fixing the payroll liabilities in QuickBooks Desktop.

You can create a negative liability adjustment to offset the Federal Unemployment tax liability.

Here's how:

Click on Employees at the top.
Select on Payroll Taxes and Liabilities.
Click on Adjust Payroll Liabilities.
Select the correct Effective Date.
In the Taxes and Liabilities section, click the Payroll Item column and select the correct payroll item.
Enter the negative amount of the adjustment.
Click Accounts Affected and choose Do not affect accounts.
If you have additional employees, click Next Adjustment and repeat the steps for each affected employee.

To know more about the process, please check out this article: Adjust payroll liabilities.

Feel free to check out the following materials below for additional reference:

You can add any details below if you need further assistance with payroll taxes. We're always here to guide and assist you.

GladeBaptist · ‎April 25, 2022

That worked!

Thank you SO much!!! This has been driving me crazy!!!

MFID_maribeth · ‎July 17, 2023

How do I know what the correct effective date should be? Should it be retroactive to the date that the FUTA tax was first withheld? Or should it be today's date?

JaeAnnC · ‎July 17, 2023

Joining in on this thread to answer your query about the correct effective date to select when adjusting payroll liabilities in QuickBooks Desktop (QBDT), @MFID_maribeth.

Yes, you're right. The effective date should be when the FUTA tax was first taken from your employees' paychecks.

Please see this article for detailed information: Adjust payroll liabilities in QuickBooks Desktop Payroll.

Moving forward, ensure that your employee is exempt from federal or state withholding so that it is not withheld from their paychecks. If your employee claims an exemption, keep a copy of the W-4 or state form for your records.

Additionally, you'll want to generate reports in QBDT to have a quick view of your payroll totals, including employee taxes and contributions.

I'm always available to cater to your payroll concerns, Maribeth. Just post your questions in the Reply section below, and I'll be there right away to respond. Keep safe and have a nice day ahead.

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