Shareholder distribution

Welcome to the Community space, @Darryl6.

Since you're using QuickBooks Online Payroll Core and we're the ones who pay and file taxes for you, I'd suggest contacting our Payroll Support Team. They can further explain the set up on how to record the shareholder contribution and the process of creating a paycheck.

Here's how to reach them:

1. Click the Help icon in the upper right of the screen.
2. Select Contact US on the pop-up. 
3. Enter what you're needing assistance with in the How can we help? field and choose Continue. 
4. Click Get a callback.
5. Enter your contact information.
6. Select Call me.

You might want to check out this article to know more about the updates of the tax feature: Tax feature updates with QuickBooks Online Payroll Core.

Additionally, let me include these resources where you can get additional details about filing the quarterly forms:

• File quarterly tax forms
• About Form 941, Employer's Quarterly Federal Tax Return
• How QuickBooks Populates The 941.

Please know that you can always get back to here in the Community if you have any other questions. I'm always around to help. Have a good one.

Yes, I contacted support already and was told that that is not a payroll item available in QuickBooks Online Core Payroll. But that I could use a pay type that is treated the same as for as taxation and forms is concerned using the article  Supported pay types and deductions explained.

I had another ProAdvisor tell me that "The very definition of a distribution is that it's not payroll. If you pay them with a paycheck then it's Officer's Salaries."

It sounds like this would not be considered payroll, but instead should be entered as a QuickBooks Online transaction somehow effecting an equity account.

Should shareholder distributions be entered into QuickBooks Online as a check/expense or as a journal entry? 

Yes, I contacted support already and was told that that is not a payroll item available in QuickBooks Online Core Payroll. However, a work around would be to use a pay type that is treated the same as far as taxation and forms is concerned and just rename the pay type to what I need it to be named. This was a great suggestion, however I am unable to locate a pay type that is taxed the same and treated the same on forms as what is listed in this article: Supported pay types and deductions explained

A fellow ProAdvisor told me "The very definition of a distribution is that it's not payroll. If you pay them with a paycheck then it's Officer's Salaries."

Based on the comment from a fellow ProAdvisor and QuickBooks Support, It sounds like this would not be considered payroll, but instead should be entered as a QuickBooks Online transaction effecting an equity account.

Should shareholder distributions be entered into QuickBooks Online as a check/expense or as a journal entry? How should I set this up in the Chart of Accounts? Is there an article on this? 

Thank you for your time.