I'm glad you reach out here in the Community. I'm here to lend a hand with your concern about the PTO balance in QuickBooks Desktop.
When creating the payroll item, you'll need to select Sick Pay or Vacation Pay for the wages. Since you're unable to edit this option, you can delete and recreate the item in the Payroll Item List window.
For the detailed steps on how to set up the payroll item correctly, please visit the article I'm adding below: