QB desktop payroll - 940 form exempt payments

Let's get this sorted out, @DebC-TSB.

You can perform these troubleshooting steps to isolate the issue. Let's start with fixing the tax tracking type on the payroll item that should be exempt from FUTA. Here's how:

1. Navigate to the Lists menu and select Payroll Item List.
2. Next, right-click the payroll item, and click Edit Payroll Item.
3. Choose Next until you get to Tax Tracking Type.
4. Ensure that the tax tracking type chosen matches the payroll item used. Using the tax tracking type Other is not recommended.
   • If the tax tracking type is correct, go to Step 5. 
   • If the tax tracking type is incorrect, select the correct one, then click Next twice, then Finish. Go to the next section in this article Step 3: Fix your employee wages. 
5. Click Next. 
6. In the Taxes window, review the Federal Unemployment tax. 
   • If Federal Unemployment is unchecked, check it
   • If Federal Unemployment is checked, uncheck it 
7. Select Next, then Finish. 

After that, you'll now have to fix the FUTA wages for the incorrect payroll item used on paychecks for each employee. For the detailed instructions, please proceed to Step 3 of this article: Troubleshoot Part 2 on Form 940 in QuickBooks Desktop Payroll Enhanced. 

Once done, run the Payroll Summary by Tax Tracking Type report and check if this shows the correct wages. If the same issue persists, I'd recommend utilizing the Verify-Rebuild data tool. This identifies and resolves the most commonly known data issues within your company file.

It's easy to view your employee data and monitor your business finances in QuickBooks Desktop. To do so, you can open any payroll reports that suit your needs. To give you a list of those reports and an overview of what data they show, please head to the Excel-based payroll reports page. 

If you have any other questions, please let me know by adding a comment below. Have a good one.

Hello Divina,

That's the same answer that's already on the website!

There are no payroll items that are "exempt". There are no payroll items that total the discrepancy.

My post was not to find an answer... I know the answer (if the tracking needed to fixed), the post was to find out if anyone else in the community was experiencing a similar issue. 

I can send you my "Payroll Tax Tracking Report".  Send me an email address. I'll send you pics.

I appreciate your help Divina Mercy. I plan on contacting tech support tomorrow. I'll add to this post when their answer.

Hello, DebC-TSB. 

We want to make sure this is taken care of by the correct department. While the steps provided by my colleagues didn't remove the problem, I would also suggest reaching out to our Customer Support team. They can check your account and provide additional troubleshooting steps or get this escalated for a fix. 

Here's how: 

1. Go to Help and select QuickBooks Desktop Help.
2. Click Contact Us.
3. Press the Search for Something else button then type your concern in the Ask us anything box.
4. Hit Search then scroll down to get your contact options. 

Refer to this article to learn more about our contact options and support availability: Contact QuickBooks Desktop support. 

The Community is always available to help you 24/7. You can post your questions here. Take care and stay safe!

YES!! Same problem here.  Did you figure it out when you contacted support?  Mine is saying that it determined we have 3189.48 in exempt payments, but nothing we paid to anyone falls under any of those sub categories... we only paid regular old hourly wages.  I'm so confused.

Hi jaimeoparker!

I understand that you want to ensure the accuracy of the payroll forms. Let me assist you.

Exempt payments are wages that are not subject to FUTA taxes. Payroll items are included in QuickBooks to track three types of exempt payments and these are moving expenses, dependent care, and group term life. If you use these payroll items, QuickBooks will automatically include them on your Form 940.

If you have payroll items with the following tax tracking types and any payroll item set to calculate before FUTA withholding, QuickBooks includes the amount for that payroll item in the Exempt Payments total on your Form 940.

• Fringe benefits

• Group term life insurance

• Retirement/pension

• Dependent care

• Other

You'll want to review your payroll items to fix this. I've added these links if you need help in correcting the 940 and employee's YTD:

• Troubleshoot Part 2 on Form 940 in QuickBooks Desktop Payroll Enhanced

• Entering wage base and tax adjustment to correct employee's quarter (qtd) or year to date (ytd).

Lastly, here's the article for more details on how to run payroll reports in Excel: Excel based payroll reports.

We'll be right here if you need more assistance with this. Take care!