Reissuing Expired Paychecks

I’ve got some information for you about uncashed payroll checks, @duneslady.

In QuickBooks Desktop Payroll, unclaimed wages such as uncashed checks must be reported to the state. Under Escheat regulations, you’re responsible for remitting unclaimed property to the state.

To resolve this, you’ll want to reach out to your state agency for rules governing escheatment. Please know that rules vary per state.

You can read this article for more information about handling escheat regulations: Understanding Escheat regulations for unclaimed wages.

I’ve attached this reference to learn how to manage your payroll efficiently: Learn about QuickBooks Desktop Payroll with how-to videos.

If you have any other payroll concerns or questions, please leave me a message in the comment section. I’ll be here to help. Take care always!

I am sorry, I think I caused confustion with my post.  The employee put the checks away to deposit later after she could get to the bank, but it ended up being several months later and by the time she went to the bank they had reached the 6 month expiration date.  She has requested I issue new checks to replace the ones form earlier in 2021.  I wasn't sure how to proceed on issuing the new checks. Can you help?

Thank you so much for your response.  It was very helpful.  Again, I am very sorry for the confusion.   

I have an abandoned paycheck that needs to be reported as unclaimed property to the state. What is the correct process to clear that paycheck from the payroll account and reissue it to the state?  

Hey there, Sandy_L. I can help share some information on how to handle employees' unclaimed wages or paychecks in QuickBooks.

You are in charge of reporting and giving the state an abandoned paycheck. The state becomes the owner of it via the Escheatment process.  

Here are the things you must do and don't do for unclaimed wages.

As an employer, you should do the following:

• Hold the check for the employee to claim for a while (maybe 1 to 5 years) before you turn it over to the state.
• Before you notify your state of any abandoned or unclaimed employee wages, make an effort to get in touch with your employee.
• Contact your state agency to find out what to do with employee pay in your state.

As an employer, you shouldn't do the following:

• Void unclaimed employee paychecks. The employee is still entitled to this money. 
• Change the name on the paycheck to that of the state. The paycheck must remain in the employee's name.
• Return the uncashed paychecks to your checking account. Once a paycheck is issued for wages to an employee, those funds no longer belong to the company in any way.

For more details, please see this article: Understand the process of unclaimed wages.

Please let me know if there is any other way I can assist. I'll be around to help.

I understand the Unclaimed Property concept. I am seeking assistance with how to clear the payroll account. In other words, what are the transactions that need to be entered into Quickbooks that will (1) pay the state (2) remove the outstanding paycheck amount from the payroll checking account. 

I am needing the same information. I have already submitted the info to the State but I still have the paycheck sitting in the uncleared checks in QBooks. I am trying to close the year and need to know how to clear the check.

Please see 2 replies below.

Hello there, @Annmaricoop. I want to make sure you get the help you need.

To ensure we're on the same page, can you add more details on where the uncleared checks are showing on your QuickBooks Desktop account? Any extra information is appreciated.

We are looking forward to hearing from you. Have a great day!

It is sitting in the uncleared checks in the bank account. We attempted to get ahold of the former employee to no avail. I have already reported it to the State as an escheated check. I now need to clear it somehow from the bank and issue an ACH to the State.

Hi there, Ann.

Let me help you clear the escheated check in QuickBooks Desktop (QBDT).

If you still have the option to edit the transaction in your company file. We can manually clear this one in your Chart of Accounts (COA). I’ll show you how:

1. Go to the Lists menu and select Chart of Accounts.
2. From there, select the account to which the check was added to.
3. Tick the check column to clear the transaction.
4. Then, select Yes in the prompt message to finish.

On the other hand, if you no longer have the option. I recommend consulting your accountant to know what actions to take in clearing this type of paycheck. 

Additionally, you can check out this article to find out how to handle escheated checks: Understand the process for unclaimed wages.

Feel free to comment if you have more concerns with your transactions. The Community always has your back. Have a good one!

RoseJillB,

Checking the "clear" column on a transaction doesn't remove it from the account balance. We need a way to restore the balance to the payroll account at the point we pay the state through accounts payable. I'm thinking a journal entry is the correct way to do that. What are your thoughts?