Online Payroll is not picking up the correct FUTA rate for Officer

Hello there, Ahead4numbers.

First, we need to make sure the SUI tax exemption is checked on your employee's profile. Once done, our system will automatically accrue FUTA liability at 6% moving forward. Here's how:

1. Click Workers, then choose Employees.
2. Choose an employee, then click to open the profile.
3. Click the Pencil icon next to Pay.
4. Click the Pencil icon under What are Employee's withholdings?.
5. Click Tax exemptions.
6. Put a check mark in the SUI box.
7. Click Done.

Please check the screenshot as your reference.

Once it's updated, I suggest contacting our payroll support to create a payroll adjustment for 2018. Here's how:

1. Click Help inside QuickBooks Online.
2. Choose Contact us.
3. Enter a brief description of your issue, then click Next.
4. Choose either Message an agent or Talk to a Specialist.

You're always welcome if you have other payroll concerns. Have a good one! 

Hello there, @ahead4numbers.

I'd be glad to help guide you to the right support who can check further why QuickBooks Online Payroll doesn't pick up the correct FUTA rate.

Once the taxes are set up correctly, QuickBooks Online (QBO) calculates taxes/liability correctly.

To check and verified this further securely, it would be best if you can get in touch with our Support Team. For the support's contact information, you may check it here: Contact the QuickBooks Online Customer Support team.

On the other hand, you may check our Help articles for future reference about QBO and payroll: Help articles for QuickBooks Online.

I'll be right here to help you if you have any other payroll or QuickBooks concerns, just add a post/comment below. Have a great day ahead!

Thank you but blanket answers like "Once the taxes are set up correctly, QuickBooks Online (QBO) calculates taxes/liability correctly" are a waste of your time and mine.   This is not helpful and it’s not true.

I reached out to the community for help BECAUSE

1.) your Help Articles did not answer my question and

2.) your Customer Support insisted that in order to get the FUTA “employer rate” of 6%, I need to buy the QuickBooks Self-Employed version (seriously? Ridiculous!!)

Here is the issue in QBO Payroll: I have an Officer who is exempt from Washington State Unemployment Insurance.

In the employee record, under tax exemptions, the box is checked for Is an Exempt Corp Officer.

The FUTA rate for this person should be 6%.

However, QBO Payroll is applying the regular effective rate of 0.6%. As a result, the payroll taxes, liabilities and 940 Form are all incorrect ($42 should be $420).

Has anyone in the Washington User Community experienced this problem with employer taxes?

Hey there, @ahead4numbers.

Let me guide you on how to change your tax rate in the Payroll Settings.

I've tried this on my end and was able to change the rate of my employee. You may follow these steps to guide you:

1. Click on the Gear icon, choose Payroll Settings.
2. Click on Tax Setup.
3. Click on Washington under State Tax Information.
4. Under WA SUI, click on Change or add new rate.
5. Enter your new rate and the Effective Date.
6. Click on OK.

Once done, QuickBooks will now automatically apply the new rate on your next paycheck.

Please leave a comment below if you have any other questions. I'll be here to provide assistance.

Thank you Allesandra, but you must be answering someone else's question. 

State SUI has nothing to do with the problem I've encountered except that the officer is exempt.

Why in the world would I set up a State SUI rate for an Officer who is exempt from State SUI?

It's the Federal Unemployment rate that is the issue.  

---

@ahead4numbers wrote:

Thank you Allesandra, but you must be answering someone else's question. 

State SUI has nothing to do with the problem I've encountered except that the officer is exempt.

Why in the world would I set up a State SUI rate for an Officer who is exempt from State SUI?

It's the Federal Unemployment rate that is the issue.  

---

Hello, Was this ever resolved? I have the same exact problem. The rate is supposed to be 0.6% not 6.0%

Welcome to the thread, KSanders.

Let me share information with you how FUTA tax rate is calculated.

The effective Federal Unemployment Tax Act (FUTA) rate for 2019 and 2020 is 6% in which employers can take a credit up to 5.4% taxable income if paid state unemployment taxes that result to a net FUTA tax rate of 0.6%.

As mentioned by my colleague GarlynGay, if any of your employees are exempt for State Unemployment Insurance (SUI), the system automatically adjusts the employer's FUTA tax rate to 6% for the first $7000/00 taxable wage. Thus, QuickBooks Online Payroll will use the 6% tax rate for FUTA for this employee. 

To help check the payroll taxes calculated, you can run the Payroll Tax and Wage Summary report to verify the employee's wage.

Visit also below links to know more about how FUTA works:

• Payroll 101
• Federal Unemployment Tax Act (FUTA) Credit Reduction States
• Payroll tax wage bases and limits

If you have further questions about payroll, feel free to get back to me. I'd be more than happy to answer it for you. Have a nice day.

This DOES NOT show up anywhere in the current Quickbooks Online. The box for exemptions instructs me to contact support. Further, there is No Place in the company level Payroll Settings to set state or federal unemployment rates. Your help for Online Quickbooks must apply to a different program than the one I have. 

Thanks for joining the thread, psolheim. I'm here to help you redirect to our Payroll Support Team.

They can pull up your account in a private 1-on-1 setting and can further assist you with setting up your State and Federal rates in QuickBooks Online. Here are the steps on how to reach out to them:
 

1. Go to this link: https://help.quickbooks.intuit.com/en_US/contact.
2. Select QuickBooks Online.
3. Click on Search for something else and enter your concerns in the Tell us more about your questions field.
4. Tap Search.
5. Click on Start a message.

Please let me know if you have any additional tax concerns. I'll be right here to help.

I am having the same issue. Here is what I know. FUTA for the officer is calculated at the 6% all year long as the 5.4% credit is not available unless you pay all your state unemployment on time. Therefore the payroll system has to figure it this way. In January of the following year when I run the 940, the system does calculate the correct percentage on the 940 (0.6%) but I still have an outstanding liability for the difference. I have been fighting with Quickbooks for 3 years on this now. Each year I have to call in and have Quickbooks do a payroll adjustment. They are always reluctant to do so and usually make it for the incorrect amount and I have to call again. Frustrating .

Thank you! I think you helped me understand what I've been researching on my own since QB support hasn't been able to answer my questions.

QB instructed me to make a 940 deposit at the end of Q3 for $623.33. Now QB is saying total for the year is only $316.96, even though it shows $420 for this one employee (that is exempt from WA SUI) when I run the Tax and Wage Summary Report. Does this sound correct to you? 

Thanks for checking in with us, Arianna09.

QuickBooks Online (QBO) calculates the right taxes and liability once we set up the taxes correctly on your company. If the employee is exempted from SUI, the system automatically adjusts the employer's FUTA tax rate to 6% for the first $7000/00 taxable wage. Moving forward, QBO will use the 6% tax rate for FUTA for this employee. 

You are right, we need to run the Payroll Tax and Wage Summary report to verify the tax amount and customize the period to this year. It helps you identify the payroll taxes calculated for the employee's wage. If the FUTA tax amount isn't correct, let's wait until the end of the quarter or until the employee reached the allowable taxable wage ($7000.00) to see if the system applies the adjusted 6% rate.

To help you review the report, we recommend contacting our Payroll Support Team. They'll pull up your account in a secure environment and help you with this one. You may send a message via chat. They'll pull up your account in a secure environment and assist you with your concern. To ensure we address your concern, our representatives are available from 6:00 AM to 6:00 PM on weekdays and 6:00 AM - 3:00 PM on Saturdays, PST. Here's how:

1. Go to the Help menu at the upper right.
2. Select Contact Us.
3. Enter your concern.
4. Click Let’s talk.
5. Choose Start a chat. and type in your contact info.

Visit also below links to know more about how FUTA works:

• Payroll 101
• Federal Unemployment Tax Act (FUTA) the Credit Reduction States
• Payroll tax wage bases and limits

The Community will always have your back if you need anything else in QBO. Assistance is just one click away. Take care always. 

I have one employee whose FUTA is calculated correctly at .60%, the second employee at 6.0%.  I cannot open the Exemptions page for either to see if the SUI box is checked. Is there another route into it?  The only other difference I see between the two is that the Form W-4 Box 2c is checked for the incorrectly calculated employee, but I don't see how that would have any effect.

???

Hi there, rsanders.

Welcome back to QuickBooks Community. I appreciate the complete details you've shared about your concern in calculating FUTA.

A cache full of history and temp files can cause unexpected behaviors, such as unable to open the Exemptions page to see if the SUI box is checked. I recommend logging in to your QuickBooks account using a private browser. This is to rule out the possibility of a webpage issue, and private browsing doesn't store local files or cache.

Use these keyboard shortcuts based on the browser you're using.

• For Firefox or Microsoft Edge, press Ctrl + Shift + P.
• For Chrome, press Ctrl + Shift + N.
• For Safari, hold down Command + Shift + N.

If it works in incognito, I recommend clearing the cache of your regular browser. This removes the history or log of sites so you can start with a clean slate. You can check this article to see the steps: Clear cache and cookies to fix issues when using QuickBooks Online.

If the steps above didn't work, use another supported browser as alternatives.

On the other hand, yes, there's another option to see if the SUI box is checked in the employee's information. You can run the Payroll Summary by Employee Report. From there, you're able to confirm if the SUI box is checked once this detail is shown on the report.

Here's how:

1. Click the Reports menu on the left panel.
2. Choose the Payroll Summary by Employee in the search box.
3. Filter the date range with the correct date.
4. Click the Run report button.

Then, since the W-4 form is completed by the employee and used by employers to calculate how much income tax to withhold, this will not affect the FUTA calculations.

Please refer to this article to see different details on how you can troubleshoot and QuickBooks information about lines on Form 940: How QuickBooks populates the 940.

I’d be glad to help some more if you have other questions about FUTA calculation or any QuickBooks Online concerns. Have a great day.

I am also in WA state. The information may be true for online QB, but the desktop version has no gear icon. I was able to pay the 940 tax at the 6% rate that showed the correct amount ($420) but when I attempt to print the form to send in, it shows $42.

Hello there, sprints.

The printing issue you're experiencing can be related to the latest PDF reader installed on your computer. Let's consider repairing it so you can view and print your payroll tax form. I'll show you how:

1. Close all your open programs, including QuickBooks.
2. Go to Start.
3. Type Control Panel, then press Enter.
4. Select Programs and Features.
5. Click Acrobat or Adobe Reader.
6. Select Uninstall/Change.
7. Click Repair.
8. Select Install.
9. Click Finish.

Once the system finished repairing your PDF reader, consider restarting your computer before viewing and printing your payroll tax form.

One possible reason why you’re having the issue is that the pdf reader is damage. Several users were able to fix it by running the pdf repair tool.

1. Download the QuickBooks Tool Hub file.
2. Open the file you downloaded (QuickBooksToolHub.exe).
3. Follow the on-screen instruction on how to install.
4. Double click the icon to open the tool hub.
5. Once there, select Program Problems. 
6. Choose QuickBooks PDF & Print Repair Tool. 
7. Try to open again the pdf file.

If this won’t work, you can proceed to solutions two, three, and four in this article: Troubleshoot PDF and Print problems with QuickBooks Desktop.

Please leave a reply below if you have other questions about printing your payroll forms. Take care and stay safe always!