How do you handle direct deposit child support payments in QB online? Do I create a bill and pay it that way? Click add in the bank feed because it is a direct deposit?

Hi there, @Frankly!

There are two scenarios you can consider before recording a child support payment. I'm here to share them and help you from there.

First off, if you're paying child support directly from your company for a contractor, you can record it as a bill and pay it. But you'll need to create a liability account first before recording a bill. Let me show you how:

1. Go to the Accounting menu.
2. On the Chart of Accounts window, click on New.
3. Select Other Current Liabilities for the Account Type.
4. Choose a Detail Type.
5. Enter the Name of the Child Support account.
6. Click Save and close.

Once done, here's how you can record the bill:

1. Go to the Plus icon.
2. Under Vendor, select Bill.
3. Select your contractor.
4. On the Category Details section, select your liability account.
5. Enter the amount.
6. Click Save and close.

However, if you're paying child support for your employee, you can simply add a deduction to your employee profile. This way, it'll automatically be deducted into your employee's check when you run payroll. To do so:

1. Go to Workers.
2. Select Employees.
3. Find and open your employee's profile.
4. Under Employee details, select the Pencil icon on the Pay section.
5. Scroll down the page to the Does your employee has a deduction? box.
6. Select Add deduction.
7. Choose Garnishment and Child/Spousal Support for your employee deduction.
8. Enter the needed information for your employee's deduction.
9. Select OK.
10. Click Done.

In addition here's an article you can read to learn more about how you can add a deduction to your employee: Setting up a Wage Garnishment.

Lastly, if you connect your bank on the Banking page, you can easily match your transaction once it'll be downloaded into your account. You can read this article so you'll be guided on how to do the task:

• How to Connect Bank and Credit Cards?
• Download, Match, and Categorize your Bank Transactions.

In case you need some related articles in managing your account, you can visit our Help Articles page for QuickBooks Online for reference.

If there's anything else that I can help you with, please let me know in the comment section down below. I'll be always around ready to help.

Thank you for this answer.  The person is an employee and the garnishment is set up.  So I simply set the payment to the "other current liability" for child support that is already set up in the chart of account and click add in the bank feed?  Is it correct to show up in the balance sheet as a negative number?

Thanks for adding more details about your concern, @Frankly.

Every business has a different structure and it goes the same way when tracking transactions. To ensure the garnishment is set to the proper account, I suggest consulting with an accountant.

They can recommend which one to use and make sure the child support is tracked to the correct category type. Once you have the information, enter the new account.

When you’re ready, open the Preferences page to link the transaction to the appropriate category. Here’s how:

1. Go to the Gear icon at the top and select Payroll Settings to view the Preferences page.
   
2. From there, navigate to the Preferences section and click the Accounting link.
   
3. In the Accounting Preferences screen, choose the correct category and then click the drop-down to select the account.
   
   
4. Click OK to keep the changes.

To input the child support, I suggest following the instructions provided by my colleague.

For your other concern, yes, click the Add button to record the entry. Before proceeding, categorize it to the appropriate account.

This way, the amount is recorded to the correct posting account. Let me show the steps.

1. Go to the Banking menu on the left panel and choose Banking to open the Bank and Credit Cards page.
   
2. From there, select the bank you’re working on.
3. In the For Review section, click on the entry to expand it.
   
4. Then, click the drop-down for Category to select the account.
   
5. Once done, hit the Add button.

In regard to the balance sheet report, the liability account will show a negative sign when it has a debit balance instead of the normal credit balance. You can also consult the accountant about the issue, so they'll guide you through the steps on how to fix the problem.

Leave a comment below if you have any other concerns or questions. Please know the Community has your back, and I'll be right here to help you. Have a good one.

I have quickbooks online  -  I receive child support as a direct deposit in my account how do I record it A?

it is not  taxable income  but I want to keep track of monies received

thank you  

Hello, @gceron.

There are different ways to track your non-taxable income in QuickBooks. Let me share some information about it.

First, you can connect the bank account where the direct deposit child support is posted with QuickBooks. Once connected, you can categorize it to a specific non-taxable income account.  

The other way is to deposit it. Here's how:

1. Click the New Icon (+).
2. Select Bank Deposit.
3. Choose the Bank Account where you want to deposit Child Support.
4. From the Add funds to this deposit section, enter the Child Support payment details.
5. Click the Save and Close button. 

Also, you can consult your accountant so you'd be guided in assigning the correct category and accounts to your transactions. 

You can check these articles to learn more about managing your downloaded bank transactions:

• Connect bank and credit card accounts to QuickBooks Online
• Assign, categorize, edit, and add your downloaded banking transactions
• Categorize and match online bank transactions in QuickBooks Online

Let me know if you have other questions in tracking your Child Support in QuickBooks. I'm always here to help.