Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
I just discovered that our payroll tax item for state unemployment has been inappropriately including the sick pay component of employee compensation as taxable. Is there a way to adjust this payroll tax item so that it doesn’t include sick pay? When I go to the Taxable Compensation screen within the series of Edit Payroll Item screens, Quickbooks will not let me deselect Salary-Sick Pay and gives me the error message that "this type of compensation is always taxable in Quickbooks". I guess I could set up a separate Payroll Tax Item for state unemployment and use a Tax Tracking Type of None but I’m hoping there’s a better solution.
Any help would be greatly appreciated.
Solved! Go to Solution.
RE: I just discovered that our payroll tax item for state unemployment has been inappropriately including the sick pay component of employee compensation as taxable. Is there a way to adjust this payroll tax item so that it doesn’t include sick pay?
Yes, QB does this for all SUI items. It isn't smart enough to exclude sick pay. There isn't a way to adjust it. Still, this isn't usually an issue in the end as employees usually make enough for the year so that their regular pay would have generated the max tax.
I've heard that the tax works this works this way in WA state, and that even the state's own payroll system for paying their employees calculates tax on their sick pay.
Hello, @Border Collie Boy Part 2.
Thank you for posting in the Community. Let me share some insight into payroll tax items. It uses to track individual amounts on a paycheck and accumulate year-to-date (YTD) wage and tax amounts for each employee. There are payroll items for compensation, taxes, other additions and deductions, and company-paid expenses.
Yes, you can set up another payroll item for state unemployment, Here's how:
Note: Setting up a payroll item with a tax tracking type of Other can potentially cause problems with W-2 reporting, so be sure to check with your accountant before choosing this solution.
For more detailed steps and information about Payroll tax item, you can check out this article: Set up payroll items for new state taxes.
I will also include these handy articles for additional reference:
Drop me a comment below if you have any other questions about setting up payroll item in QuickBooks Desktop. I'll be happy to help you out. Wishing you and your business continued success. Take care always!
RE: I just discovered that our payroll tax item for state unemployment has been inappropriately including the sick pay component of employee compensation as taxable. Is there a way to adjust this payroll tax item so that it doesn’t include sick pay?
Yes, QB does this for all SUI items. It isn't smart enough to exclude sick pay. There isn't a way to adjust it. Still, this isn't usually an issue in the end as employees usually make enough for the year so that their regular pay would have generated the max tax.
I've heard that the tax works this works this way in WA state, and that even the state's own payroll system for paying their employees calculates tax on their sick pay.
Thanks for the reply but I was hoping for a way to adjust the categories of compensation that are taxed by state unemployment. As my question stated, I was already familiar with how to set up a separate payroll item with a Tax Tracking type of None.
A later reply gave me the answer to my question, however, which was that QB does not have the functionality to edit the state unemployment payroll item.
Regardless, I appreciate that you responded to my question.
Thanks for the reply but I was hoping for a way to adjust the categories of compensation that are taxed by state unemployment. As my question stated, I was already familiar with how to set up a separate payroll item with a Tax Tracking type of None.
A later reply gave me the answer to my question, however, which was that QB does not have the functionality to edit the state unemployment payroll item.
Regardless, I appreciate that you responded to my question.
we cant run payroll taxes online....it says urgent problem but even QB people cant fix it....wondering why we are paying for this when they dont return calls after they say they will fix.....2 weeks now and not fixed and no one calling us back....NOT HAPPY!
we had a direct deposit check not work for our empoyee and QB put some unknown bank account on our list of accounts...this is messed up and im pretty sure QB wont see or answer this either!!
We appreciate you joining the thread, @ailascatering.
Please know that we want to ensure you can get through this situation as soon as possible so you can run payroll inside your company file. Also, we want to make sure we're providing the best possible solution to your concerns, and with that said. Can you tell us the specific error message that you received on your end when running payroll? You can also attach a screenshot below.
You can visit us anytime here in the Community space or leave a comment below. We'll make sure to get back to you right away. Take care!
You have clicked a link to a site outside of the QuickBooks or ProFile Communities. By clicking "Continue", you will leave the community and be taken to that site instead.
For more information visit our Security Center or to report suspicious websites you can contact us here