Submitting and accounting for child support withholdings

I have several employees with child support garnishments. Most are paid to the same agency. Should I set each one up with a separate deduction code for each employee? Is this how I would generate a check to pay the liability and have identifiers for each employee referenced on the check? I am a new Quick Book user and trying to set-up Diamond Enterprise 24.

Thank you

Thank you for your prompt response on the thread, @CCourson. Let me share more information about setting up the child support garnishment.

Yes, you're correct. We'll need to set up the child support for each of your employees, as they are giving different amounts. In paying the liabilities, we can create a single check with the total amount of all child support instead of sending different checks to the agency since the garnishment will only be recorded in QuickBooks Desktop.

First, let's set up the payroll item:

1. Select Lists, then Payroll item lists, and click the dropdown arrow, then New.
2. Choose Custom Setup, then Next.
3. Click Deduction, then Next.
4. Enter the name of the payroll deduction and click Next.
5. Enter the agency name for which the liability is paid and hit Next.
6. In the Tracking Type dropdown, leave None and select Next.
7. In Taxes, click Next.
8. In Calculate based on Quantity, make sure Neither is chosen and select Next.
9. In Gross vs. Net, choose Net to calculate the amount for taxes and then hit Next.
10. Enter Default Rate and Limit if there is one. Please don't forget to add a percentage sign for the percentage and a decimal for the dollar. Click Finish.

To add the Garnishment to the employee:

1. Go to the Employees, then Employee Center.
2. Double-click the employee's name.
3. Select Payroll Info.
4. In the section for Additions, Deductions, and Company Contributions, under the Item name, add the new garnishment item.
5. In the Amount column, enter the amount per paycheck to take out.
6. Hit OK.

Moreover, if you want to set up a payroll schedule, refer to this article: Set up and manage payroll schedules.

If you still have questions, don't hesitate to reply to this thread or create a new one. Have a great day.

Thank you for the response. But I need a little more clarification. Let's say I have two or more employees with child support that is payable to the State of Arizona. If I set them up with the same deduction code of Child Support when the check is generated for the State of Arizona will it show the amounts for each employee separately with their individual case numbers? If so, where does it pull that information from? Or should I set up separate codes, such as Child Support - Smith, Child Support-Jones, etc.? Then would I be able to generate one check to the State with all the info. for each person listed separately?  Thank you.

I'll provide the necessary information to clarify your inquiry about setting up Child Support withholdings in QuickBooks Desktop (QBDT), @CCourson.

When you set up the same deduction code for all your employees, the amounts for each employee with their case numbers won't show when you generate a check for the state, as you only utilized one payroll item. Thus, you'll have to create them separately with different liability accounts for each employee to pull up this information and accurate payroll liabilities tracking.

I'll show you how:

1. Go to Lists, then select Payroll Item Lists.
2. Click the Payroll Item dropdown arrow below, then New.
3. Choose Custom Setup as the setup method, then Next.
4. Pick Deduction, then Next.
   
5. Enter the name of the name of the payroll item and Next.
   
   
   
   
6. Hit <Add New> in the Liability account menu. Type in the liability name with an indicator for that specific employee, then tap Save & Close, then Next.
7. Leave the Tracking Type as  None and Next.
8. Skip the Taxes window, and in the Calculate based on Quantity section, make sure Neither is chosen, then Next.
9. In Gross vs. Net, opt for Net to calculate the amount for taxes and Next.
10. Provide the Default Rate and Limit if there is one. Please don't forget to add a percentage sign for the percentage and decimal for the dollar and press Finish.
    
    
    

Afterward, follow the steps provided by my colleague, JoanaC, to add the new payroll items to their designated employee profile.

Furthermore, once you're ready to pay your state agency, please refer to this reference for guidance: Pay your non-tax liabilities in QuickBooks.

In addition, there are different payroll reports you'd like to run to have a clear picture of your employee info, wages, taxes, deductions, and business finances.

These clarifying details will point you to the best option for managing your employee's child support withholdings in the program. If you require additional assistance, don't hesitate to comment back. We've got your back, @CCourson.

I also  have a child support  deduction but the State of Florida allows a $5.00 fee along with

each deduction as income to our business as income. I have the PR deduction set up correctly for the remittance to the State but I do not know how to set up the $5.00 as income. 

Hello there, Chipster12.

Thanks for providing the information about your concern. Allow me to share the details regarding your situation.

In QuickBooks Online, we are unable to choose an income account for PR deductions (Garnishment), even though it was allowed in your state. You can directly contact our support team to request an adjustment, and they will assist you in setting it up correctly for the future.

I will provide you with the steps on how to contact support.

Here's how:

1. Login to your QuickBooks Online company.
2. Select (?) Help.
3. Use the search field to enter your inquiry and search for Help articles, or:
   • Select Contact Us and then choose a topic to connect with the appropriate expert.

Keep us informed if you have any further questions regarding child support or other related matters in QuickBooks Online Payroll. We're here to assist you.

I would like to know how you track garnishments in QuickBooks Online if you are paying by electronic payments through a third party that the state uses such as ExpertPay. I have the employee deductions set up, but I am not sure how to track for reporting/tracking purposes. Can you direct me on the best way to set this up?

Tracking garnishments in QuickBooks Online (QBO) Payroll is easy, @HB66. I'm glad to work with you on performing this.

You can track the payment from the third-party application using Checks. Here's how:

1. Click + New button, then go to Check.
2. In the Payee ▼ drop-down list, choose who you want to address it to.
3. Pick which account you want the money to come in from the Bank Account ▼ drop-down.
4. Enter any other necessary information.
5. You can click Print check if you plan to print it. You can also Print later.
6. Select Save and Close.

You can also read this article to know what other ways to track garnishment payments: Learn the difference between bills, checks, & expenses.

Additionally, visit this article to learn how to make payroll items inactive or active: Set up, change, or delete employee-paid payroll deductions.

Please return here if you have additional questions about recording garnishment payments. Click the Reply button below, and we'll be there. Thank you, and enjoy the rest of the week.

I have the garnishment set up, but the payment is being set up through a third party via electronic payments. We take the money out of the employee check, then ExpertPay (third party) takes the money out of the company funds via our checking account electronically each week. This is the company the State of Missouri uses for small companies. How do I track this within QuickBooks Online?

Thanks for following up with the Community, HB66.

After you've added your garnishment to QuickBooks, the next step is to pay it to your appropriate agency. You'll need to make the payments directly to your agencies or creditors, as instructed in the garnishment order or tax levy.

To make garnishment payments, you can typically use checks. If you're unsure whether you should use a check to pay for a transaction, you'll be able to learn more about the process in our Learn the difference between bills, checks, & expenses article.

Here's how to create and record checks:
 

1. Use your + New button, then go to Check.
2. In the Payee ▼ drop-down list, choose who you want to address it to.
3. From your Bank Account ▼ drop-down, pick which account you want the money to come from.
4. Enter any other necessary information.
5. If you plan to print your check, you can click Print check. In the event you'd rather print it later, hit Print later.
6. Select Save and close.

I've also included a detailed resource about working with garnishment payments which may come in handy moving forward: Create & record checks

I'll be here to help if there's any additional questions. Have a great Thursday!

Are you AI? Twice I posted that I needed help with NOT paying by checks but a third party will will be withdrawing the money from the checking account electronically each week. The state uses this 3rd party, as do multiple other states. I need to know how to set up recording the money coming out of the employee's check (already set up to come out) and the money coming out of the checking account. Can you please give me instructions that are helpful? The ones that have been given are in the system and do not address electronic payments by a third party.

I appreciate you for clarifying your concern about recording the money coming out of your checking account, @HB66. Let's enter this in your QuickBooks Online (QBO) to keep your records accurate.

Since the third-party payroll provider initiated the deduction from your employee's check, we can record the money withdrawn from your checking account as an expense. Doing so will create an entry to your books about the money taken out from your account. Let's begin by following the steps below:

1. Click the + New icon and select Expense under the Vendors column.
   
2. From there, select the third-party provider from the Payee dropdown. If you haven't set them up yet, click + Add new to add them on.
3. Choose your checking account in the Payment Account dropdown.
4. Select the Payment Date and the Payment Method.
5. Fill out the necessary fields to complete your transaction details and click Save and Close to finish.
   

    

Furthermore, you can explore this article about creating recurring transactions like expenses: Create recurring transactions in QuickBooks Online.

That should enable you to record the transaction, @HB66. If you have additional queries about payroll deductions and other QuickBooks-related matters, please don't hesitate to post them here. Take care!