Employee History when paid cash without deductions

QuickBooks Desktop lets you enter payroll taxes and I'm here to show you how, @Cindy Croft.

I know that having accurate calculations in payroll taxes will give so much advantage to your business. That’s why I’m here to provide to help you record them.

Please know that you can enter historical tax payments from this year or previous years. These are used by the program to figure out how much you owe to federal and state agencies. Also, to assist you in ensuring the accuracy of your future tax contributions and files.

In the meantime, if you’re trying to input current year's tax payments, you can use the Payroll Setup window. I’ll show you how:

1. Access the Payroll Setup Interview.
2. Proceed to step 5 Year-to-Date Payrolls.
3. Select Continue.
4. If your company has issued pay checks this year, choose Yes. And select Continue.
5. On the next screen, you will have three choices: Paychecks, Tax Payments, and Non-Tax Payments. Select Edit on Tax Payments.
   If you need to enter historical pay checks, see Enter historical payroll data in QuickBooks Desktop Payroll.
6. Print the Tax Payments Checklist. And consult with your accountant before proceeding.
7. Select the arrow next to the quarter you would like to enter tax payments in.
8. When a quarter is selected, the window will open all taxes owed within that quarter. There will be three columns: QuickBooks - Calculated Amount, Total Amount You've Already Paid, Balance Remaining. Enter the payroll tax payments you've made.
9. Once all payments have been entered for a quarter, select the next quarter and repeat the process until all tax payments have been entered.
   • If no tax payments have been made, Total Amount You've Already Paid should be empty and columns one and three should match. If they do not match there may be issues when the prior payroll was entered. Which will need to be addressed and corrected before continuing.
   • Once the payments are entered, balances in Balance Remaining may need to be paid.
10. Select Done Entering in Tax Payments when you have completed entering payments.

I also recommend consulting your accountant to ensure we entered the tax payments correctly. You can provide them the Tax Payments Checklist you used and discuss further about this.

In case you need to record the historical tax payments for the present or prior years using other process, check out this reference: Enter historical tax payments outside the Payroll Setup window.

Please don't hesitate to let me know if you have any follow-up questions for QuickBooks Desktop Payroll. I'll be here to help you further.

I have gone thru and entered the payroll history and because no tax deductions were made from paychecks, there are errors for SS, Medi, and state PFML due to none being deducted. What do I do now? I cannot correct the errors as suggested by QB because that would make the net pay incorrect.

Hello, Cindy. 

Good to have you back! I appreciate your time in getting back to this thread with the update. I'll ensure you'll be able to correct those errors on the tax deductions and enter your employees' data accurately. 

Regarding the errors, they are likely caused by incorrect tax amounts, which is why QuickBooks is forced to make the corrections. 

The first thing we have to do is to ensure we have the latest tax table updates for QuickBooks. This will help us make sure that we have the correct tax rates and calculations. Here's how to update it: 

1. Go to Employees, then select Get Payroll Updates.
2. Check the Download Entire Update checkbox.
3. Click Download Latest Update. 

Next, let's also backtrack the data you've entered and ensure the calculations are correct, and we didn't miss a dollar or two from the deductions. 

To do this, we can verify the amounts by using our Paycheck Calculator: https://quickbooks.intuit.com/payroll/paycheck-calculator/.

After verifying the paycheck data, we'll want to enter the adjustments using the payroll history module. Let's follow the steps given by JamaicaA again. 

We can also follow the steps on adjusting the liabilities here: Adjust payroll liabilities in QuickBooks Desktop Payroll.

After we're done making the tax corrections and ensuring the deductions are accurate, we can run a summary report to see all of your employees' data. Check out this article for a guide: Create a payroll summary report. 

You're more than welcome to post again if you have other concerns regarding your employees' payroll data. If you happen to come across any payroll-related obstacles or while entering other record, let me know and I'll help you out. 

Please see the pdf document attachment to see the issue that I was having getting payroll history to balance.

I also included my solution that I finally came up with to make it work.  I created payroll additional items to balance against the taxes that were not deducted from each paycheck. I set the items up so they don't increase the employee's earnings.

The instructions for entering payroll history do not address how to handle the situation that I was working with.