Adjust Payroll Liabilities for Taxes Already Paid

gharris198 · ‎May 11, 2020

Hello!

I have just implemented epay for payroll tax liabilities starting with my 5/15/20 payroll. Previous to this, the CPA handling the books for this group made deposits for taxes through EFTPS and then recorded journal entries to keep the payroll tax liabilities straight. My balance sheet is correct as of right now; all four employee's prior year and YTD numbers are correct. However, now that I've indicated I want to e-pay these things, I'm getting "overdue" liabilities red arrows for all my payroll tax liability payments for 2019 and 2020 up until today. My question is, how can I make these lines go away? The taxes have already been paid and accurately recorded (albeit via journal entry).

Thanks in advance for any help!

MaryLandT · ‎May 11, 2020

Thank you for contacting us, gharris198.

You'll want to enter those prior tax payments since you've already paid the. This will help remove those liabilities for 2019 and 2020.

To do so, I'm glad to provide you the steps on how to accomplish this:

From the Help menu, choose About QuickBooks.
Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
Click Next until you reach the Enter prior payments section.
Select Create Payment to enter all prior payroll tax and non-tax payroll liability payments you've already paid.
Enter the Payment Date and For Period Ending date accordingly.
In the Taxes and Liabilities field, choose the payroll tax item that you've already paid and want to record in QuickBooks Desktop. Then, enter the amount.
Select test the Accounts Affected... button. This displays options for how you want the payment to affect your Chart of Accounts (COA).
- Do not affect accounts: Use this option if your QuickBooks accounts have correct balances. Selecting this option will cause the prior payment to not show up in the bank register.
- Affect liability accounts but not the bank account: Use this option if your checking account has the correct balance. Selecting this option will cause the prior payment to not show up in the bank register.
- Affect liability and bank accounts: Use this option if none of the account balances are correct. Selecting this option will cause the prior payment to show up in the bank register.Select test the Accounts Affected... button. This displays options for how you want the payment to affect your Chart of Accounts (COA).
Choose Next Payment once your first payment is completed.
Continue this process until you have completed all payments. Click Done to save your work, then select Finish to close the window.

After that, you can start creating new paychecks. Then, pay and file your tax liabilities.

Let me know if there's anything else you need anything else by commenting below. I'm always right here to help.

View solution in original post

MaryLandT · ‎May 11, 2020

Thank you for contacting us, gharris198.

You'll want to enter those prior tax payments since you've already paid the. This will help remove those liabilities for 2019 and 2020.

To do so, I'm glad to provide you the steps on how to accomplish this:

From the Help menu, choose About QuickBooks.
Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
Click Next until you reach the Enter prior payments section.
Select Create Payment to enter all prior payroll tax and non-tax payroll liability payments you've already paid.
Enter the Payment Date and For Period Ending date accordingly.
In the Taxes and Liabilities field, choose the payroll tax item that you've already paid and want to record in QuickBooks Desktop. Then, enter the amount.
Select test the Accounts Affected... button. This displays options for how you want the payment to affect your Chart of Accounts (COA).
- Do not affect accounts: Use this option if your QuickBooks accounts have correct balances. Selecting this option will cause the prior payment to not show up in the bank register.
- Affect liability accounts but not the bank account: Use this option if your checking account has the correct balance. Selecting this option will cause the prior payment to not show up in the bank register.
- Affect liability and bank accounts: Use this option if none of the account balances are correct. Selecting this option will cause the prior payment to show up in the bank register.Select test the Accounts Affected... button. This displays options for how you want the payment to affect your Chart of Accounts (COA).
Choose Next Payment once your first payment is completed.
Continue this process until you have completed all payments. Click Done to save your work, then select Finish to close the window.

After that, you can start creating new paychecks. Then, pay and file your tax liabilities.

Let me know if there's anything else you need anything else by commenting below. I'm always right here to help.

gharris198 · ‎May 11, 2020

Thank you. Just one follow-up. In my QB "Pay Liabilities" tab, one of the taxes shown is "Federal 941/944/943." But when I try to enter the prior payments as you describe, I don't see that description, only "Federal Withholding" and the various FICA-related items. I expect I will need to break all of this out to make the total go away, or will it not matter since I am not wanting to affect accounts?

katherinejoyceO · ‎May 11, 2020

Thanks for actively responding, @gharris198. I understand that you'll want to ensure you're recording your previous tax payments correctly.

To clarify, payments for prior quarters are entered as a lump sum, while for the current quarter are entered as per payroll.

Hence, for your taxes paid from the first quarter (January to March) should be entered as a lump sum amount using the Federal Withholding for Federal 941/944/943.

Then, enter your April tax payment separately as it belongs to the second quarter.

For future reference, learn about how to set reminders for your upcoming payroll tax and liability payments through this link: Set up and pay scheduled or custom (unscheduled) liabilities.

Let me know if you have more concerns about anything else. We're always delighted to assist.

Mark the post that answers your question by clicking on "Accept as solution".

ErinMill · ‎August 04, 2020

I have followed these instructions and these are still showing up in liabilities to be paid. Please help.

ZackE · ‎August 04, 2020

Thanks for joining the Community, ErinMill.

There's a few reasons why taxes you've already paid will show up as due liabilities:

They were paid through our Write Checks or Bill Payment features.
The liabilities are paid, but not recorded.
They were overdue in one period and/or underpaid in another.
Their paid through dates are dated after the check date or crosses from one year to the next.

The steps provided by my colleagues are how to address a scenario if payments were never recorded in QuickBooks.

To fix this problem, you'll need to identify why it began occurring. Once you've found its cause, you can follow the specific steps for your situation in our Scheduled liabilities payroll show as overdue or in red article.

If there's any other questions, please feel more than welcome to reach out anytime. That's what I'm here for. Enjoy the rest of your day!

ErinMill · ‎August 04, 2020

These are liabilities that have already been paid this year. We started using QB 7/1. I have made the adjustments and they still show up as been due. Read the whole article next time.

ErinMill · ‎August 06, 2020

Still waiting for response. Please help.

Candice C · ‎August 06, 2020

Good Morning, @ErinMill.

Thanks for reaching back out to the Community. If you're still having issues with these liabilities after trying the recommendations from my colleague, then I suggest contacting our Customer Support Team. They'll be able to do a screen share to review your account to see why this keeps happening.

Here's how:

Go to the Help icon.
Pick QuickBooks Desktop Help.
Press the Contact Us button.
Give a brief description of the problem and click Continue.
Scroll down and select to Get a call.

If you run into any trouble along the way, just let me know. I want to make sure you're able to get back to running your business. Take care!

MP11 · ‎October 05, 2020

I have a similar issue I show a positive balance I do need to adjust it. Where I need help how do I determine which tax liability account to select I haven't been able figure it out where I got the balance.

Thank you

MP

aquinones · ‎April 07, 2021

I have balances for two pay periods, how would I clear these?

Rose-A · ‎April 07, 2021

Hi, aquinones. I appreciate you joining in this thread. Let me help you clear your balances for two pay periods.

Clearing your two pay periods is quick and easy. You can follow the steps provided by MaryLandT above or you can follow the detailed steps and instructions in this article: Adjust payroll liabilities in QuickBooks Desktop. On the same link, you'll find a write-up about how to correct your year-to-date additions and deductions in QuickBooks.

Also, you can go through this write-up: Payroll Liability and/or Balance Sheet Report shows incorrect amounts for payroll liabilities. This will help you determine the common reasons why your balances are off and tips on how to resolve them.

Please let me know how it goes by leaving a comment below. I want to make sure your balances are cleared and accurate. I'll be around to keep helping. Have a most pleasant day!

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Adjust Payroll Liabilities for Taxes Already Paid