Workers Comp Liability

I have all the steps you'll need to clear your payroll liabilities, @CindyP3.

You may enter prior payments and choose the Affect liability accounts but not the bank account option. Selecting this option will cause the prior payment to not have an effect on your bank register.

Here's how:

1. From the Help menu, choose About QuickBooks.
2. Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
3. Select Next until you reach the Enter prior payments section.
4. In the Enter Prior Payments window, select Create Payment.
   
5. Enter the Payment Date and For Period Ending date accordingly (in many cases these dates will be the same).
6. In the Taxes and Liabilities field, choose the payroll tax item that you've already paid and want to record in QuickBooks Desktop. And enter the amount. You can add a memo to remind you what the payment is for.
   
7. Select the Accounts Affected and choose Affect liability accounts but not the bank account. Then, click OK.
   
8. After you have completed your first payment, continue to the next by selecting Next Payment. Continue this process until you have completed all payments. Then, select Done to save your work.
9. Select Finish to close the window.

These instructions are available from our guide on entering historical tax payments in Desktop payroll. Doing this will clear the amounts in the Payroll Liabilities report.

Additionally, here are some resources for more insights about calculating your total Workers' Compensation premiums:

• Pay Workers' Compensation premiums.
• Manual Workers' Compensation in QuickBooks Desktop

Please let me know if there's anything else I can do to be of assistance. I'm determined to ensure this payroll liability issue gets straightened out. Have a great day.

I need to make sure you completely understand my situation before I try your solution.  I just started doing payroll in January and have completed one payroll.  Therefore I have not paid workers comp prior to this and that is what I want to remove from liabilities. 

I do not need to pay workers compensation from payroll.  All I was trying to do was track my workers comp by code so that I could go online to the insurance web site and pay by workers comp.  I have other discounts and charges that apply to my workers comp liability and can not pay it through payroll.

All I really want to do is remove the amount showing in payroll liabilities and track my wages by wc code and not record any more liability  for wc.

If your solution will work in this case I will be thankful.  I just didn't want to try it and it make the situation worse.

I have since figured out how to remove the liability by going in on each paycheck and changing the employee wc code to exempt.  I just need to know if I can track wc by code without creating any liabilities.  If not I will have to do it by hand each week.

Let me know if you have a solution for tracking without recording liability.

Thanks

Great job in removing the liability from your employee's paycheck, @CindyP3.

Let me shed some light regarding tracking the Workers' Compensation code in QuickBooks Desktop.

If the employee's code was set to Exempt upon the setup, then this won't create any liability. 

However, if there's a specific code assigned to the employee and you need to change it Exempt on the paycheck, this needs to be done manually like what you did to the previous paychecks.

You can edit the employee's Workers' Compensation code to the accurate one. This way, it will take effect on your succeeding payroll transactions.

To learn more about managing Workers' Compensation together with modifying its rate, please scan through this link: Learn how to set up your Workers’ Compensation in QuickBooks Desktop.

I'll be around to provide more help if there's anything else you need. Keep safe!

On setup my employees were setup with the correct wc codes.  My question is if I run payroll with these codes will it create a liability or will I have to go back and edit the checks to exempt after I get my wc tracking report?

Thanks for getting in touch with us here, @CindyP3.

Yes, running payroll with these codes will create a liability since QuickBooks tracks the Workers Compensation as a payroll liability. To see the accounts affected by this item, follow the instructions listed below.

1. Go to the Lists menu and select Payroll Item List.
2. Right-click on the Workers Compensation item and select Edit Payroll Item.
3. Click Next. It will display the liability and expense account associated with the Workers Compensation item.
   

You can follow the steps listed from our guide on manually tracking Workers' Compensation in QuickBooks Desktop. At the bottom of the page, you can find steps on how to edit the rate, as well as the Experience Modification Factor. 

Don't hesitate to post a comment below if you have other questions. We're always available here to help. 

This is extremely helpful for we who pay these liabilities with an AMEX or Visa, BECAUSE:

there is no credit card payment option in the payroll liabilities window.

Thus, I have to do this payment clearing every month in order to keep my liabilities balanced.

I used the option that doesn't affect my bank; the center option, and just listed all of my 2021 payments so that I got close to my real balance that I can zero out.  I'm still way over in what I owe, but I'm working it out thanks to this thread! 

Thanks!

CORRECTION - I used the "do not affect accounts" and that was what worked.   I had an Intuit assistant/CPA on the line with me and she helped me walk through this, too.  We were both happy to find this works.

Hi - a year later! :) 

I'm one who has to have the WC codes to report properly to our insurance carrier, as each code is billed differently. I found the 'fix' to the original question to be a great fit for my giant liability balance that was showing.  By "not affecting accounts," I was able to clear that balance, keep my codes and my sanity. :) 

Thus, by making your employees exempt, I feel you're not going to get the most out of your QB experience and its time-saving reports, as well as making payments easily.  You'll always have a minor adjustment to clear to your WC expense account at year-end, but the fix in this thread is working for me, now, as I learned it yesterday! :D  yay! 

I also learned that this method is the only way to clear credit card payments of the liability, and lower that balance at the same time!  So.. the long-time mistake by prior bookkeepers has led to an answer to a two-fold problem! 

I hope this helps you, too! 

T

I need to zero out the amount in the Workers Comp Payroll Liability account.  I pay workers comp from a monthly invoice from our insurance company and do not need to track the amounts. I do need to be able to track the hours and print the workers compensation by code and employee report for our annual workers comp audit performed by our insurance company.

How can I not track it as a payroll liability but still track on for this report?

I know a way on how you can zero out the amount of the payroll liability account, @mlanclos.

I'd be happy to guide you on how so you can achieve your goal. 

To start, we can disable the payroll schedule for the Workers Compensation account. Here's how:

1. In your QuickBooks Desktop (QBDT) company, go to the Employees tab. Then, select Payroll Center.
2. Next, click the Pay Liabilities section.
3. From there, select Change Payment Method under the Other Activities drop-down list.
4. Then, in the QuickBooks Payroll Setup window, click Benefit and Other Payments.
5. Choose Schedule Payments, and double-click the Worker's comp to edit.
6. Under Payment Frequency, pick the I don't need a regular payment schedule for this item option.
7. Once done, select Finish twice. 

When finished, let's now run the Payroll Liability Balance report and set the date to the whole year. From there, check to see if the Workers Compensation liability account still has a balance. 

If yes, you can make payroll liability adjustments. I'll guide you on how:

1. In your QBDT program, navigate to the Help menu.
2. Next, choose About QuickBooks Desktop and press Ctrl+Alt+Y keys on your keyboard.
3. Set the date range and then, click the Next button until you see the Create Payments option. 
4. From there, select Worker's comp under the Item Name column. 
5. Then, in the Prior Payments of Taxes and Liabilities window, click the Accounts Affected button.
6. Tick the radio button for the Do not affect accounts option and then, select OK.
7. Click Done and then, select Finish.

For your reference about the process, please check this article: Liabilities were paid, but never entered into QuickBooks Desktop.

Also, running other payroll reports in QBDT is easy. Once you open one, you can also download and print the data to have a handy copy of it.

I'm just around the corner if you have any other payroll concerns in QBDT. Simply leave a reply below and I'll circle back to help you out. Keep safe always and have a great day ahead. 

I have tried this approach several times and it doesn't work. I can enter a JE in the register and it will clear it but it does not clear it out of the Pay Liabilities window in my Employee Center. This has been going on for years and I feel like there has to be an easy fix yet I can't find one... 

I’m here to help and ensure you'll be able to clear those payroll liabilities dues, ShaunaS. 

There are several possible reasons why this is happening on your end. We need to make sure we set up Workers Compensation and record the payment correctly in QuickBooks.

For using the manual process for the Workers Compensation feature, we can either pay using payroll liability checks or through the scheduled payments feature.

Before doing so, let's ensure that we updated QuickBooks to the latest release and downloaded the payroll tax table. Then, we can follow the steps below on how to do payroll adjustment so we can clear out those amounts in your payroll liabilities: 

1. Click the Employees menu and select Payroll Center.
2. From the upper left, click the Transactions tab.
3. Click Liability Adjustments and double-click on the adjustment you created.
4. Select the Employee radio button and select employee from the drop-down.
5. Review the date and ensure that you use the same date as the last paycheck of the affected quarter or use today's date if you’re working on the current quarter.
6. Click OK.

We might want to visit these resources to learn more about managing payroll liabilities in QBDT:

• Set up and pay scheduled or custom (unscheduled) liabilities.
• Remove or delete a scheduled payroll liability.

Don’t hesitate to leave a message if you have other payroll concerns. I’m always here to help. Have a great day and always take care!