Employee Taxes Incorrect Selection - Federal Unemployment Tax (Company Paid)

Betty, I had the same situation happen.  I attempted to correct as you instructed, but the FUTA tax was not listed in the "taxes & liabilities" section.  Also, shouldn't the amounts withdrawn from the employees be returned somehow since it was deducted from their payroll?  They are minimal amounts, but I guess I need a little more help.  

Thank you, Barb

Hello BarbBieber,

Thank you for reaching out to the QuickBooks Community! Just to confirm, are you using QuickBooks Online or QuickBooks Desktop? As far as your other question, I highly encourage you to reach out to your accountant to see what is the best practice for your company. If you don't have an accountant, our ProAdvisor service can assist with this. Simply enter your zip code, and you can connect with experts within your area. This link will be instrumental in Finding an Accountant. 

I will be looking out to your response to assist you further. Take care for now!  

I am using the desktop version.  

Federal Unemployment is a company paid tax, BarbBieber.

It means that no amounts were deducted from the employees pay. It's also possible that the Payroll Liabilities section for FUTA is not set to the correct payroll liabilities account. Aside from that, the payroll item might have also been made inactive.

These can be the reason why you can't see it when trying to create a liability adjustment. I'll help you review your Payroll Item List and make sure to review the item's setup.

Here's how: 

1. Go to the List menu and select Payroll Item List.
2. Check for the box for Include Inactive at the bottom part of the page.
3. Look for the Federal Unemployment Tax and remove the X mark before it. If it's already active, double click on it to edit the item.
4. Click Next, then make sure that the account selected in the drop-down list for Liability account is Payroll Liability.
5. Select Next until the Finish button is clickable.

Once done, go back to the liability adjustment window and check if you can already see FUTA on the list. 

Additional references when preparing your tax forms are also provided here:

• Year-end Checklist for QuickBooks Desktop Payroll
• Payroll Tax Compliance Links

Please reach out out to us again or add more replies to this thread if you need anything else. We're always here to help with any QuickBooks-related concerns.

Betty, I also have the same situation but mine is in quickbooks online. can someone help me?

Hi there, Snieman61.

Thanks for joining this conversation. I'm here to help route you to the right support that can help fix your Federal Unemployment Tax (FUTA) in QuickBooks Online (QBO).

The payroll liability adjustment option shared by my colleague above is only available in the Desktop version of QuickBooks. Since you're using QBO, I highly suggest contacting our Payroll Support team. They have tools that can pull up your account in a secure environment and help adjust your incorrect FUTA.

Here's how to reach them:

1. In QBO, go to the Help (question mark) icon at the top right.
2. Select Contact Us.
3. Enter your concern, then select Let's talk.
4. Choose a way to connect with us.

To check for our Support hours, please refer to this article: Contact Payroll Support.

I'm also adding this article that tackles managing overwithheld and/or underwithheld taxes for more information: Handle overwithheld or underwithheld employee-paid taxes.

You can also visit this article about setting up employees' Federal or State Withholding (or Income Tax) as exempt for future reference: Exempt your employee from Federal or State Withholding.

Please leave a comment below if you have additional questions about this or anything else. I'll be here to assist. Keep safe.