How to categorize payroll liabilities from prior payrolls?

Let me help you to get that prior payroll recorded correctly, @jndnclean.

Yes, you can match the transaction you’ve entered for prior payrolls. Please ensure to select the bank account associated with payroll. 

QuickBooks Online can only match transactions if they have the same amount of payment method and transaction date. Check out this article for more details: Add and match downloaded banking transactions.

You can record the liability payment through the Enter Prior Tax History. This is a non-posting transaction, so it will not affect the bank register, but it will clear the taxes from showing due and record the deposits. Let me show you how.

1. Go to the Taxes tab then choose Payroll Tax.
2. Choose Enter Prior Tax History.
3. Click on Add payment.
4. Choose the tax type and the liability period (the period that the taxes were accrued) then, click OK.
5. The recorded payment will now show in the Prior Tax Payments screen.

You can check this article on how to enter tax payments made in QuickBooks Online Payroll: Recording prior tax payments.

Please don’t hesitate to click the Reply button if you have other questions. I’m always here to help.

Thank you. I don't see an option to enter prior tax history. Is that possibly because the verification debit for the payroll bank account hasn't come through yet? 

That's correct, @dnicks.

Direct Deposit (DD) will take 2 to 3 banking days to confirm and activate the account after signing up. An email will be sent to you confirming your direct deposit status. 

Once verified, you'll be able to enter a prior tax history in your QuickBooks Online (QBO) account. To learn more about DD, you can read these great resources for reference:

• Set up direct deposit for employees
• How to check your direct deposit setup status

As always, you can get back to us whenever you have other concerns. We're always around to help.

Great, thanks so much.

So, I've verified the bank account for payroll.  There is still no option for entering prior payroll payments.

Hi jndnclean,

Direct Deposit is a nice feature for paying employees and taxes. However, it isn't a requirement for entering prior payroll or prior tax payments.

You will lose option to record a prior payroll if you chose the scenario that says you haven't paid an employee payroll before using QuickBooks during setup. Also, you can no longer enter prior payroll once you've created a paycheck.

In this scenario, it would be best to contact our Support, so they create corrections to reflect the prior payroll data.

1. Open this article: Support types and hours.
2. Expand the Online Payroll section.
3. Click Start a message on the payroll product that you're subscribed to.

Once you already have the payroll data, you can record prior tax payments.

Please don't hesitate to go back to this thread if you have additional questions about payroll.