Why do my payroll liabilities show up as negative on my balance sheet on the date I run payroll until the date of my payroll checks?

Happy Monday, @lpenney18. I'm here to explain why you're seeing your Payroll Liabilities showing as negative on the Balance Sheet.

Here's a Community Article that will help you determine why your Payroll Liabilities is showing negative: Payroll Liability and Balance Sheet Report figures explained.

The negative amount shows that there's a tax overpayment. The most common causes of this are:

• Incorrect Tax Rate
• Deleted paycheck after the tax payment was approved for the payroll period
• Incorrect reconciliation of historical taxes
• A duplicate tax payment was made

I've provided the steps below that you'll need to follow to correct the overpayment:

1. To view the details of the Payroll Liabilities from the Balance Sheet, double-click the amount to see the Transaction by the Payroll Liability Item report. Then, double-click on any amount to review the paycheck or responsibility adjustment associated with the balance. If any amounts appear, they're related to that paycheck.
2. Run a Payroll Liability Balance report to view any outstanding balances that need to be paid or deposited by selecting Reports at the top menu bar, next Employees and Payroll, then Payroll Liability Balances.
3. Look for Payroll Liability Payments or Liability Refunds that were not entered correctly in QuickBooks Desktop. If there are credits (negative amounts) showing in the Payroll Liabilities Balance report, you may have a credit/refund that needs entering. You could've also deposited out of the payroll module using 'Make Deposit.'
   • Note: Settings don't affect accounts when entering liability adjustments which cause the modifications to not show up in the bank register, and not change the Payroll Liability and Expense accounts.

That should get you on the right track! Let me know if you need further assistance. Have a wonderful day.

I have had to override the unemployment tax rate in each employee paycheck for the entire year. In July, I paid FUTA for q1 and q2 even though it didnt reach the threshold for having to pay.  Now, employee paychecks are showing negative amounts on paystubs. 

It is a small 4 person private practice and I'm using enhanced payroll.

Hi there SR Smith.

Thanks for stopping by the Community, based off of your description of what's going on and what my colleague posted earlier in the thread this can be caused by 1 of 4 things. 

• Incorrect Tax Rate
• Deleted paycheck after the tax payment was approved for the payroll period
• Incorrect reconciliation of historical taxes
• A duplicate tax payment was made

I would recommend going through and reconciling your account and see if that helps when you go to run payroll. Here, you can find a helpful article that breaks down the reconcile workflow. If after that you're still running into issues, I suggest reaching out to our phone support team, this is because they have the ability to dive into your account and see exactly what's going on in a 1-on-1 setting. To reach them you can follow these steps:

1. Open QuickBooks.
2. Go to Help, then select QuickBooks Desktop Help.
3. Select Contact Us.
   
   
    
4. Give a brief description of your issue, then select Continue.
   
   
    
5. We’ll provide you a few support options. Select which one is best for you.

Check our support hours and contact us.

If you have any other questions, feel free to post here at any time. Thank you and have a nice afternoon.