State Withholding Paid Manually with Credit Card

Hi there, @BayMax Commercial.

Thanks for taking the time to reach out to us. I have all the detailed steps to help correct your payroll liability payment.

Yes, federal and state agencies allow you to pay tax liabilities using a credit card online. You have two ways to record them in QuickBooks.

Beforehand, you'll have to delete the tax payment generated by QuickBooks by following these steps:

1. Go to the Employees menu and select Payroll Center.
2. Click the Payroll tab, then select Pay Liabilities.
3. Under the Payment history section, click All Payments, and locate the payment.
4. Double-click the transaction to open and choose Delete. Then, select Yes to confirm.

Then, record payroll liabilities paid with a credit card is by using a pass-through account. Follow these instructions:

Step 1: Create a new bank account.

1. Go to Lists, then select Chart of Accounts.
2. Below, select Account, then select New.
3. Select Bank, then select Continue.
4. Enter “Pass-Through Account” in the account name field.
5. Leave the rest of the fields blank, then select Save & Close.
6. Select No if prompted to set up a bank feed. 

Step 2: Create custom liability payment.

1. Go to Employees, select Payroll Taxes & Liabilities, then select Create Custom Payments.
2. In the Select Date Range For Liabilities window, select a date range, then select OK.
3. Uncheck the To Be Printed box.
4. Under Bank Account, select the pass-through account created in step 1.
5. Select the payroll liabilities paid by credit card from the list. Then select Create.

Step 3: Enter credit card charges.

1. Next, go to Banking, then select Enter Credit Card Charges.
2. Select the date it was paid.
3. Select the Expenses tab.
4. Under the Account, select the pass-through account created in step 1.
5. Enter the amount you paid by credit card.
6. Under Memo, you may enter the payroll liability and reference number, if any.
7. Select Save & Close.

Another way is to create a zero-dollar value check in the bank account used for payroll liabilities.

Lastly, if your credit card is connected to QuickBooks, you'll have to match the downloaded transaction with the credit card payment entered above. 

I also recommend reaching out to your accountant for further advice on how to properly handle your tax records in QuickBooks. This way, we can make sure that your books are accurate once you close them.

Furthermore, you can run the Payroll Liabilities Balance report in QuickBooks. This way, you can check how much you owed for each tax, deduction, and company contribution assigned to your payroll item.

Let me know how else I can help you with QuickBooks by adding a comment below. I'm more than happy to lend a helping hand. Keep safe.

Hi, BayMax Commercial.

Hope you’re doing great. I wanted to see how everything is going about correcting your payroll liability payment. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at anytime.

Looking forward to your reply. Have a pleasant day ahead!

According to the IRS (Federal Withholding), withholding deposits must be remitted via their EFTPS system and this only allows for direct debit to a bank account (a credit card cannot be used).  Quickbooks support verified this by phone, but I'm told there may be a way around this using Credit Karma somehow.  Not sure what that means.  Ideas??