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Incorrect State used for Employee Witholding for entire previous calendar year

When I printed W-2's for 2018 I discovered that the state witholding for one of my employees was incorrect. He lives and works in the state of Montana, but when he was added into payroll state taxes were set to Idaho. This employee started work with us 1-2-2018, so for all of 2018 witholding for Idaho has been taken out of his check instead of witholding for the state of Montana. How do I go about correcting this? From what little my state tax agency was able to tell me I need to get him a corrected W-2. I efiled W-2's with the SSA shortly before I discovered this error, so I am assuming a corrected W-2 will be required.

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QuickBooks Team

Incorrect State used for Employee Witholding for entire previous calendar year

Hi there, @sr732.

 

Welcome to the Community. I'm here to ensure to get this payroll tax sorted out so you can correct the W-2 of your employee.

 

If the W-2 has been accepted by the agency, then you'll need to submit a correction. To do that, you can change the state of your employee to the state of Montana and then create a negative liability adjustment to zero out the incorrect amount for the state of Idaho. You can also run a payroll checkup so you'll be able to know the exact taxes that needs to be calculated for the state Montana. You can check out this article for more information about this process: Correct or Amend W-2 Forms. 

 

However, if the W-2 was not yet accepted by the agency, you can reach out to our Customer Care Team so you can cancel the form that you sent and file it again with the correct details. 

 

 To reach them:

  1. In your browser, navigate to https://help.quickbooks.intuit.com/en_US/contact.
  2. Choose QuickBooks Desktop.
  3. Click the issue or topic.
  4. Click the Green Phone button to see the support number.

This should get you up and running. Please let me know if there's anything else you need. I'll be here to help you out. Have a good one!

Highlighted
Level 1

Incorrect State used for Employee Witholding for entire previous calendar year

Thank you for your response! Unfortunately for me I submitted the forms and they were agency accepted, so I will need to submit a correction. I am in the process of adjusting the payroll liabilities following the article you linked in your reply. I am to step # 7 where you choose accounts affected and I am not sure which option to select. Do not affect accounts or Affect liability and expense accounts? I am also having a hard time figuring out on the payroll check up how to get it to tell me the taxes for Montana. I updated the tax rate for Montana for the 2019 year, so if I run the payroll check up will it tell me the total for 2018 or for the current 2019 rate?

Highlighted
QuickBooks Team

Incorrect State used for Employee Witholding for entire previous calendar year

It’s nice to have you back in the Community, ccc1.


Thank you for following the steps provided by @ BettyJaneB and providing me additional details on what happened to the account. I’d be delighted to help fix your employee’s taxes, so your payroll records are correct.

 

There are parameters you'll have to consider when selecting the affecting account. You'll only select Do not affect for the following reasons:

  • Previously used a general journal entry to adjust a liability for one or more payroll items.
  • Paid the payroll liabilities in the Write Checks window.

Affect your account if you are doing either of the following:

  • Adjusting your liability because of rounding differences.
  • Entering a credit or expense for your payroll liabilities.

Once you’ve selected the appropriate affecting account, then continue in creating the liability adjustment. To determine the taxes for Montana, open the Payroll Detail Review Report and create manual adjustments to correct the wage or tax discrepancies.

 

To run the report:

 

  1. Go to Reports at the top menu bar.
  2. Select Employees & Payroll.
  3. Choose Payroll Detail Review.
  4. Enter the correct date range.
  5. Once done, select Refresh.


In regard to the Payroll Checkup, the tool only reviews data for the current year. If you want to run a payroll checkup for a previous year, change your computer's system date to the last day of that year. For more information about the process, check out this article: Run Payroll Checkup.

 

The information I provided will correct your taxes and forms.

 

Stay in touch if you have additional questions about payroll. Please know that I'm just a click away. Have a great day ahead.

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