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Level 1

Simple IRA employee contribution

I set up the Simple IRA employee contribution to be paid via direct deposit (from the employee's paycheck).  The amount withheld (and paid) is also showing as a payroll liability (separate from the employer contribution).  How do I indicate the payroll liability has already been paid via direct deposit?

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Simple IRA employee contribution

Thanks for getting in touch with us today, Spanic,


I can share some insights about processing Direct Deposit transactions and paying tax liabilities in QuickBooks Desktop.


The Direct Deposit feature in QuickBooks allows you to process your payroll checks electronically. However, this feature does not handle tax payments. What gets deposited to your employee's bank account is only their net check amount excluding all other tax deductions.


The system automatically separates your payroll liabilities (employer and employee taxes) from your payroll expenses (wages). What you can do to clear the Simple IRA employee contribution from your tax dues is to create a liability check to record the payment in QuickBooks. Once you have the liability check, you can pay the amount to your agency together with the employer contribution.


Here are helpful articles to guide you on how to pay your taxes in QuickBooks:

That should get you all set, Spanic. Please feel free to let me know if you need further assistance, I'm here to help you with all your QuickBooks concerns. Have a good one!


Level 1

Simple IRA employee contribution

I paid the Simple IRA liability by setting up direct deposit on each of our two employees.  I still have the liability to clear, without the need to cut a payroll liability check.

Level 1

Simple IRA employee contribution

That's the issue, the liability has already been paid via direct deposit.  On the employee record I have set up two direct deposit accounts - one for their net paycheck and one for their portion of the Simple IRA contribution.  There is no further liability to pay, yet the system thinks there is.

QuickBooks Team

Simple IRA employee contribution

Hi there, Spanic.


I appreciate you getting back and providing more details about your Simple IRA employee contribution. Let's work together to record your tax payment.


Whenever you pay taxes outside QuickBooks, you will have to record them manually for the system to clear your liabilities. Here are the steps to do it:

  1. Click the Help menu, choose About QuickBooks.
  2. Press Ctrl + Alt + Y or Ctrl + Shift + Y once you see the QuickBooks logo.
  3. Select Next until you reach the Enter prior payments section (see screenshot).
  4. Click Create Payment.
  5. Enter the necessary information.
  6. Select Done to save your work.
  7. Select Finish to close the window.

For detailed instruction, you can refer to this article: Enter historical tax payments in QuickBooks Desktop Payroll.


Feel free to reach back to me if you have other payroll questions. I'm here to help you more. Have a wonderful day.

Level 1

Simple IRA employee contribution

Did you get a straight answer to your question?  I totally understand your question because I'm having the same issue.  Quickbooks creates the liability once payroll has processed but how do I record the liability without 'creating a fake check' because the retirement fund automatically withdraws the payment from the company's bank account.

QuickBooks Team

Simple IRA employee contribution

Thank you for joining this thread, @SyKeTa.


QuickBooks Desktop (QBDT) used to keep track of the financial health of your business. Currently, the option to record liability payments made outside the program or pay scheduled liabilities is the process given by my peer, HoneyLyn_G. For other options in recording the liability payment, I suggest consulting an Accountant. 


To know more you can read through this article: Enter historical tax payments in Desktop payroll


Also, you may want to check out this link: Set up a payroll item for retirement benefits. This article has the step by step process and details on setting up benefits using both EZ and Custom Setup in QBDT for 401(k), Simple IRA, etc. 


Please let me know if you have further questions. I'm always here to help you out. Take care always.

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