Cash Advance affecting W2 Box 1 and 16

I'll make sure you're able to match your employees' boxes 1 and 2 on their W2s in QuickBooks Desktop (QBDT), @mcclkris21.

Your employee's W2 boxes 1 and 2 data are based on how you set up the cash advance payroll item. To make sure they match, you'll have to set up the said payroll item's Tax tracking type accordingly. Doing so will ensure that your Form W2s are correct. Here's how:

1. Go to the Lists menu.
2. Select Payroll Item List.
3. Double click the Cash Advance payroll item to open its details.
4. Click the Next button until you reach the Tax tracking type page. Make all the necessary updates. 
5. Select Finish when done.

Once you're done, you'll have to manually create an employee liability adjustment. To know the exact amount that needs to be adjusted, you can pull up the Payroll Summary report. Double-click the amount of the payroll item to open the Transactions by Payroll Item report. Then, sort the Total By field by Employee. You can also refer to this article for the step-by-step guide: Adjust payroll liabilities in QuickBooks Desktop.

Also, to answer the most commonly asked questions about W2s, I'd recommend checking out this article: Get answers to your W-2 questions.

Let me know if you have other payroll concerns and questions about employees' W2s in QBDT. Please don't hesitate to drop a comment below, and I'll gladly help. Take care, and I wish you continued success, @mcclkris21.

How do I manually create an employee liability adjustment and will making this adjustment affect my quarterly 941 reports that I have already done?

Tax tracking is listed as none and none of the taxes in payroll items are checked. 

Welcome back to the Community, mcclkris21.

I appreciate you for adding more details about your concern, especially on creating a liability adjustment. This will guide us on how to correct the data in your W-2 form.

The tax tracking type for the payroll items affects how the information is shown on the tax forms. Since the cash advance is set to None, I suggest consulting with an accountant or tax adviser. They can recommend which one to use to track the payroll item.

Once you have the information handy, update the tax tracking on the Payroll Item List page. I'll help make sure you can do this task smoothly.

To change the tax tracking:

1. In your company file, go to the Lists menu at the top bar and choose the Payroll Item List.
2. This will take you to a page that shows all pay types and items added in QuickBooks.
3. Next, look for the cash advance and right-click your mouse beside it to select Edit Payroll Item.
4. In the Edit payroll Item window, click the Next button until you reach the Tax Tracking type screen.
5. From there, click the drop-down and choose the correct tax tracking type.
6. Tap the Next button until Finish.

Once done, create an employee liability adjustment. I still recommend following the solution shared by @Rea_M above. I’m adding some links below to help you in the future. These resources will help you stay on top of processing your taxes and forms.

• File your W-2 forms
• Get answers to your W-2 questions
• Year-end checklist for QuickBooks Desktop Payroll

Don’t hesitate to leave a comment below if you have additional questions about W-2 forms. I’ll pop right back in to answer them for you. Wishing you and your business continued success.