Fringe Benefits non populating on W2 under state tax

Hi, @HBrooklyn. I'm here to help.

By default, the info on the W-2 form depends on the payroll information that has been set up. Please know that fringe benefits only increases the wages in boxes 1, 3, and 5. Although not required, employers may also choose to include the total in box 14 (marked Other) or on a separate sheet. That said, you'll have to correct the tax tracking type of your payroll item so that the amount reports on box 16. Moreover, correcting the tax tracking type of a payroll item involves adding a new payroll item with the correct tax tracking type, updating paychecks, and inactivating the old one.

For the detailed steps in correcting a payroll item, kindly refer to this article: Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll.

After this, let me add this article as a reference in e-filing your federal tax forms in QBDT Payroll Enhanced: E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll Enhanced.

Let us know on the situation if the fringe benefits still don't populate correctly on your W-2s. We'll do our best to assist. Take care.

That is my issue, when you choose Fringe Benefits the tax tracking does not show that it will adjust the state wages. It only shows Federal adjustments. See attached. 

Thank you for the additional clarification and the added screenshot, @HBrooklyn. 

It appears that the payroll item you have set up is currently classified as a federal tax tracking type, which means that it will not impact the state-taxable wages on your W-2 forms. For the amount to be reported in box 16, we would need to adjust the tax tracking type accordingly.

Please refer to this article for a detailed guide in adjusting the tax tracking type of a payroll item: Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll.

Just a heads up, it's best to consult an accountant for further guidance in selecting the appropriate payroll tax item.

We're always here should you have further updates on the situation. Stay safe.

This article gives me the option to set up a new payroll item for every pay type except "addition", and that is what a fringe benefit is.

Hello, @HBrooklyn. 

The article provided by AlverMarkT above provides a step-by-step guide on how to correct a payroll item that has incorrect tax tracking in QuickBooks Payroll.

W-2 Box 16 is used to report your employee's total state taxable pay, if applicable. You can visit this link to understand each field in a standard W-2 form: Understanding W-2 Forms. 

In addition, you can also read this article to learn how to add a fringe benefit pay type to your employee profile and include it in their paycheck: Add fringe benefits to paychecks. This should be added to their paycheck before the end of the year to be reported on your employees’ W-2s. 

Here's how you can generate, print, and customize payroll reports to check your employee information, wages, taxes, deductions, and many more: Run payroll reports. 

Let me know if you need more information about W-2s or pay types. I'm always here to assist. Have a wonderful day!

Hello- I am aware of how the W-2 works, and how to add Fringe Benefits to an employees account so that it is included on the W-2. Our Fringe Benefit for Personal Use of Auto was set up many years ago, nothing has been changed. It is no longer calculating as part of the state taxable wages (Georgia). When entering a Fringe Benefit, it defaults to only affect Federal tax line items. Is there a way to over ride this and include state as well? It has always calculated correctly for us, this recently changed. 

Thanks for coming back here and for clarifying your concern. Let me share insights about calculating the Federal tax line items and SUI when entering the Fringe Benefit.

To answer your question, No. There are no other ways to override and include the state as well. Usually, the reason to experience changes is because of tax tracking type. I suggest checking where Fringe Benefit takes effect. Take note of the check taxes you see in the tax tracking, and after that, click the Default tab. It is to view if there are some changes made. If there are any, follow the steps below to fix this.

1. In Lists, choose Payroll Item List.
2. For the payroll item incorrectly set up, double-click it.
3. Add Do Not Use to the end of the incorrect item name to edit the payroll item to avoid using it for future payroll.
4. Choose Next until Finish appears, then click Finish.
5. Select the Payroll Item dropdown, and hit New.
6. Set up a new payroll item for wage, addition, deduction, or company contribution to replace the wrong one. Make sure to select the correct Tax Tracking Type and taxability.

If there are no changes to the tax tracking type, updating the tax table in QBDT is needed. It will ensure correct compliance with the tax calculations. Follow the steps below on how:

1. In Employees, go to Get Payroll Updates.
2. Choose Download Entire Update.
3. In done, select Update. When the download is complete, an informational window appears.

On the other hand, I recommend visiting this article to guide you when e-filing federal tax forms inside QBDT: E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll Enhanced. 

For any questions regarding managing your taxes inside QBDT, reply on the thread. Take care! 

Did you ever figure this out? I know how to override the numbers but like to figure out why the issue is occurring. I have had two clients so far this year that the Federal and State wages did not match and the difference is because of fringe benefits. The payroll item has been set up for years and calculating correctly until this year. I want to make sure to get the glitch fixed so that the employees of the clients are being taxed correctly as well as providing correct information.

Ensuring that you set up your Federal and State wages with the fringe benefits is indeed important, tsorensen1. 

Since you've mentioned that your Federal and State wages did not match because of the Fringe benefits, it's best to review where the Fringe Benefit takes effect. Please know that if you classify it as a federal tax tracking type, this will not impact state-taxable wages. Thus, you'll have to check and ensure that the tax tracking type is set properly. You can follow the steps above provided by my colleague to fix this matter. 

To ensure that you correctly record your data, I recommend reaching out to our accountant for further guidance since this involves filing your taxes.

You can also refer to these materials to learn more about fringe benefits and how to correct a payroll item that has incorrect tax tracking: 

• Add fringe benefits
• Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll

Furthermore, you can also E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll Enhanced.

If you have further questions regarding fringe benefits, kindly enter them in the comment section. We're always around if you need our assistance.