The last payroll check we ran in 2018 (run on December 31) calculated FUTA incorrectly. It calculated it as if none of the employees had yet met the $7000 threshold. Why did this happen, and how do I fix it? I did not notice it at the time, made the larger FUTA payment, and only caught it when preparing our annual 940 for 2018.
That should correct your liability, Finaco. You can now file your 940 form to IRS. Also, you'll need to get in touch directly with the IRS to get your refund options. In addition, there isn't an "X" form for the Form 940, if you already filed the form, you can continue using the Form 940 for amended returns.
Please let me know if you need further assistance, Finaco. I'll be glad to help you anytime. Have a good one!
Thanks for the response. I'm here to help how to correct this so you can generate your 940 with the right information.
Yes, you're correct, the deduction should automatically stop when the limit is reached. It's possible that the tax table is not updated, thus the incorrect tax calculation. You can fix this by creating a liability adjustment, just follow the steps provided by @Jen_D.
You'll need to adjust the wage base as well to zeroed out the amount. I've provided an example below.
This will get you on the right track. Let me know if you have additional questions. I'll be here to help.