Pay Liabilities tab for employee tax for a specific quarter should not exist b/c it's already paid - See Details

shsreadingma · ‎January 08, 2023

Hear me out please, normally I can create a great title but this one is hard to create a succinct title, but the issue I believe is simple I just dont know how to fix.

Issue: the Pay Liabilities tab includes a liability to pay for a quarter that I have actually already paid ... more details following:

I found out about employee tax MA PFL and PML (Paid Family and Medical Leave) taxes way way way after they were implemented in the software as well as by the State, yeah no excuse dont even ask me about how I missed it especially with a great portal with the state, it's done. Anyway I have paid all backdated taxes to state so that's all set, down to the penny, but I am trying to get everything right in QB.

Now, just keeping this simple for 2022 for the time being, what I did was in the 7/12/2022 paychecks, I took out he amounts that I should have been taking out all along for the H1 (first half) 2022 paychecks (1, 2, 3, 4, 5, 6/2022) as well as the proper amounts for that 7/12 paycheck. Then going forward for 8, 9, 10, 11, 12/2022 paychecks I took out the correct amounts for each of those. On 10/10 I made a Liabilities payment for Q3 for the correct amount, and on 1/7/2023, I made Liabilities payments from QB specifying the CORRECT Quarters (1, 2, and 4). So in summary I paid exactly what I owed over 4 quarters for 2022 with 4 liability checks assigned to the correct quarters respectively

The problem is that QB thinks that I owe liabilities for Q3 b/c of the extra money I took out of that 7/12 paycheck to make up for 1H paychecks that I didnt take anything out for these taxes. Now as a fix, if I add a liabilities adjustment to remove that EXTRA amounts I took out for those 2 taxes on 7/12, then the Pay liability item disappears and it "feels" like the issue is resolved, and maybe it is. BUT, the Payroll Liabilities Balance is now incorrect as I would expect it to be and I dont know how to address that. Either approach of adding the adjustment or not adding the adjustment gives a different problem

So maybe a secondary Q would be how could I have avoided this in the first place. I mean, I needed to take out additional taxes from my employees due to missing having taken them out in earlier paychecks, theres no way around that, but whats the best way to do that without it getting assigned to the quarter in which I am taking out the taxes. What we are seeing here is that I when I do that, QB thinks that I then owe that money as a liability to the government for that quarter even though I ended up paying those amounts with other liability checks as mentioned above.

so, in summary I dont see an easy way to have prevented this problem in the first place, and I also dont see an easy way to fix the problem that I am now faced with. My guess is there is definitely a way to do it in QB, the question is how, and is it easy or not.

Of COURSE asking this question to Intuit Payroll Support is a complete crapshoot, you could end up going int circles being passed around, spending all your time educating support people when they should be the ones educating you, and getting hung up on, yes hung up on. I am out of patience after doing that for a decade plus

Thanks

dd

shsreadingma · ‎January 08, 2023

Wow that worked and you work for QB versus a community member volunteer?

So I was basically half way there. As mentioned, I had already added 2 liability adjustments (one entry with two line items) for the 2 taxes in Q3 to lower that liability since it didnt belong in that Quarter. So now I have just added 4 liability adjustments (two entries, one for 6/30 and other for 3/31, each with two line items) for the 2 taxes for Q1 and Q2. Perfect, just moving the liabilities around to where they belong, I just couldnt make that connection without your nudge.

Now let me let you in in a little secret. In my original Q I said let me start with bla bla ba, basically 2022 was my question. But the truth of the matter is it was worse than that, I also never collected from employees since when the tax came into effect back in Q4 2019, so I needed to rectify Q4 2019 - end 2021 in the very least with the state which I mentioned I have already done. Now some people no longer work for me, so that is lost money, but for the remaining employees still working, I have created two payroll items "MA - PML Emp Q4'19 - 12/31/2021" and "MA - PFL Emp Q4'19 - 12/31/2021" and used those items to pay the state in the 9 quarterly payments I made the other day, and will use those same items to deduct from a future paycheck (next month) to capture from those employees what originally I was going to consider to be total losses due to my negligence, but hey why should I suffer, I already had penalties (which the state minimized after an appeal and waiting 6 months, yeah 6 months) and interest to pay. But these separate payroll items will allow employees and myself to properly track what is being deducted and not pile it all into a single payroll item. The difference in this new case I am mentioning (vs. what I gave as info for the original question where I had collected first and paid later) is that I already paid the state and now will collect the money from employees, at least from those that still work for me, adding these new payroll items to their profiles so that $ amounts associated with these items can be manually added to their paychecks.

***** But the CONCEPT you explained is what I needed. ****

Appreciate your help a lot. Trying to open a ticket with support is just brutal, absolutely brutal, they'll ask you a million Qs, play imaginary Covid at home, and not actually solve your issue, they know next to nothing sometimes and just want you to go away, hang up on you if they're tired of dealing with you, tell you that they'll get back to you and never do it, and get away with it with ZERO accountability internally in the call centers - If you call in to report it, you'll never reach any management and if you do they dont care. I am serious, very very serious.

View solution in original post

DHeraV · ‎January 08, 2023

Hello there, @shsreadingma,

There are a few reasons why the third quarter shows as a liability in QuickBooks Desktop (QBDT) Payroll even though you've paid them already.

The liabilities are paid but not recorded in QuickBooks.
The liabilities are paid through Write Checks or Bill Payment screen.
The liabilities were overpaid in one period and underpaid in a previous period.
The paid-through date is after the check date.
The liability being paid has a paid-through date that crosses from one year to the next.

Based on your scenario, you documented the first (Q1) and second quarters (Q2) on the paycheck dated 7/12/22, but you recorded the payment by quarter.

So, what happened was that the tax liability for Q1 and Q2 didn't reflect in QuickBooks, however, there was a payment recorded.

This explains why your third-quarter (Q3) payment shows as a liability because you have combined the amount for the 7/12/22 paycheck which the first two quarters were not deducted.

Now, QuickBooks is thinking that Q1 is overpaid and Q3 is underpaid. So, what we have to do is to spread out the taxes you deducted in July to the correct quarter through liability adjustments or make a prior tax payment record.

When creating a liability adjustment to transfer the amount from Q3. Enter the 7/12/2022 amount as negative and then make the end of Q1 and Q2 a positive amount. This way, we can match the liability check to the tax per quarter amount.

To make liability adjustments, follow these steps:

Step 1: Find payroll discrepancies

1. Run a payroll check-up (QuickBooks Desktop Basic, Standard, and Enhanced Payroll only). If you need to run a payroll checkup for a previous year, you must change your computer's system date to the last day of that year.

2. Run a payroll summary report for the month or quarter you need to adjust. Take note of the amount of Payroll Items that need adjustments.

Step 2: Adjust your payroll liabilities

1. Go to Employees, then Payroll Taxes and Liabilities.

2. Select Adjust Payroll Liabilities.
3. In the Date and Effective Date fields, select the last paycheck date of the affected month or quarter.
4. In the Adjustment is for: section, select Employee Adjustment to correct your employee’s YTD info. Then select the employee's name. Do this even if the item being adjusted is a company-paid item.
5. Under the Item Name column, select the payroll item you want to adjust.

6. Enter the Amount of the adjustment.

If the item is under-withheld, enter a positive amount to increase.
If the item is over-withheld, enter a negative amount to decrease.

7. Enter the amount under the Income Subject to Tax column if you need to make a wage base adjustment.
8. Under Memo, enter a note about the adjustment for reference.

9. Select Accounts Affected, then OK.

Select Do not affect accounts to leave balances unchanged for the liability and expense accounts. The adjustment will only change the year-to-date amounts on your payroll reports.
Select Affect liability and expense accounts if you want the transaction to reflect in the liability and expense accounts.

10. Select OK to close the Affect Accounts window.

11. Click Next Adjustment if you have additional employees to enter an adjustment for. Otherwise, select OK to save the changes.

For detailed steps, kindly visit: Adjust payroll liabilities in QuickBooks Desktop Payroll.

To make a prior payment, select Do not affect accounts to zero out the amount on the pay liability section.

I'll also include this article so you can read it if your company's Balance Sheet report shows incorrect figures for payroll liabilities in QuickBooks Desktop, there are a few reasons this can happen: Payroll Liability and/or Balance Sheet Report shows incorrect amounts for payroll liabilities.

Let us know if you require further assistance with managing your payroll liabilities. The Community team is here to help you anytime. Have a great day!

shsreadingma · ‎January 08, 2023

Wow that worked and you work for QB versus a community member volunteer?

So I was basically half way there. As mentioned, I had already added 2 liability adjustments (one entry with two line items) for the 2 taxes in Q3 to lower that liability since it didnt belong in that Quarter. So now I have just added 4 liability adjustments (two entries, one for 6/30 and other for 3/31, each with two line items) for the 2 taxes for Q1 and Q2. Perfect, just moving the liabilities around to where they belong, I just couldnt make that connection without your nudge.

Now let me let you in in a little secret. In my original Q I said let me start with bla bla ba, basically 2022 was my question. But the truth of the matter is it was worse than that, I also never collected from employees since when the tax came into effect back in Q4 2019, so I needed to rectify Q4 2019 - end 2021 in the very least with the state which I mentioned I have already done. Now some people no longer work for me, so that is lost money, but for the remaining employees still working, I have created two payroll items "MA - PML Emp Q4'19 - 12/31/2021" and "MA - PFL Emp Q4'19 - 12/31/2021" and used those items to pay the state in the 9 quarterly payments I made the other day, and will use those same items to deduct from a future paycheck (next month) to capture from those employees what originally I was going to consider to be total losses due to my negligence, but hey why should I suffer, I already had penalties (which the state minimized after an appeal and waiting 6 months, yeah 6 months) and interest to pay. But these separate payroll items will allow employees and myself to properly track what is being deducted and not pile it all into a single payroll item. The difference in this new case I am mentioning (vs. what I gave as info for the original question where I had collected first and paid later) is that I already paid the state and now will collect the money from employees, at least from those that still work for me, adding these new payroll items to their profiles so that $ amounts associated with these items can be manually added to their paychecks.

***** But the CONCEPT you explained is what I needed. ****

Appreciate your help a lot. Trying to open a ticket with support is just brutal, absolutely brutal, they'll ask you a million Qs, play imaginary Covid at home, and not actually solve your issue, they know next to nothing sometimes and just want you to go away, hang up on you if they're tired of dealing with you, tell you that they'll get back to you and never do it, and get away with it with ZERO accountability internally in the call centers - If you call in to report it, you'll never reach any management and if you do they dont care. I am serious, very very serious.

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Pay Liabilities tab for employee tax for a specific quarter should not exist b/c it's already paid - See Details