Washington State Unemployment Gross Wage Calculation for Quarterly Tax Return - NOT CORRECT

Hello there, @sixflowers.

Welcome to the Community. I understand how you want to connect with us through the phone. Due to COVID-19, our support for QB Desktop Payroll is currently limited to chat only. 

QuickBooks tax table releases are base on federal and state changes on tax calculations and payroll forms throughout the year. Let's check to see if you have the latest payroll update. Here's how:  

1. Go to Employees, then select Get Payroll Updates.
2. Check the number next to “You are using tax table version:”.
3. To identify if it’s the correct version, check out the latest payroll news and updates. 

To find more details on the tax table version, click Payroll Update Info. You can also download and get the latest payroll tax table update to make sure you have the correct tax calculation. 

I'm also adding relevant articles that can help you with different payroll taxes tasks: 

• Washington Payroll Tax Compliance. Here you can find details about tax forms, and other tax, e-file, and pay information to make sure you comply with the state tax regulations. 
• Sick pay laws for employers. It helps you learn about sick pay benefits for your employee based on your state's laws and regulations.
• Payroll tax wage bases and limits. It talks about the wage base limit on employees' taxable earnings. 

Let me know if you have additional concerns. We're always delighted to help. 

I need to find the answer to this question also.  I have the current payroll but it is calculating the sick wages but not the hours. there should not be sick wages or hours in the unemployment reports for WA state as we were just audited and found that the reports were wrong.

Of course my Payroll is up to date, I do payroll weekly and my system is set up for automatic updates.

I am on version 22012 version 0742119

As indicated earlier, QuickBooks isn't calculating the State Unemployment correctly -

I'm still unable to UNCHECK the box for Sick Hourly Wages, Quickbooks says it cannot be unselected.

See attached -

That is how I found out Quickbooks wasn't calculating the State Unemployment Tax return correctly, I had an audit as well. I have called and asked for an escalation of this issue, but of course I haven't heard a thing.

As we move into 2021 when everyone's tax rate for State Unemployment is going to increase, this is going to be an issue for everyone -

"You reported payments made to employees for sickness or accident disability under a qualified plan, but these payments are exempt under RCW 50.04.330 and WAC 192-310-040

Hi sixflowers. I recommend you reach out to the phone support team to handle this issue. To find an up to date number just follow this link to the Intuit Support page.

One of our agents will be glad to help you get to the bottom of the issue. Have a great rest of your day and be sure to come back if you have any other questions. 

I have reached out twice via the phone to QuickBooks Payroll Help to no avail -

I even asked for the issue to be escalated and they just say, they can't help me since it is has to do with the State Tax Laws, I even have provided the laws and they don't listen.

I found this is true.  After working with Tech Support we concluded it is a programing problem on Intuit's side.  I just have to fix it manually each time.

I just spoke with Accountant support about this.  My client was audited this year (2022) and refunded for overpayment of unemployment taxes.  Yes, it was taxes paid on sick and vacation time.

There isn't any way in QBD to remove the check marks on a payroll item setup of taxes on sick and vacation compensation.

Sigh

The worst part on this, is that ultimately quickbooks help does not care- if you call the state of WA or if you email or even read the directions- you will learn that ultimately it is up to the user to file the correct information and responsible for what you file.  You can complain until you are blue in the face to QB but who ever you get will not grasp the necessary change and give you some code to show a report is filed but nothing will happen.  Instead- I personally use a spreadsheet to use as a checks and balances for each payroll and have notes in my folder to remind me of the State rules for filing- taking the hours and the gross wages that the State requires and not the  actual report that QB creates- because I guarantee the QB report is always wrong. 

In the past your could remove the check mark from sick and vacation wages for the payroll item.  Intuit's Desktop payroll was the best I out there.  For some strange reason,  Intuit is destroying what was a great

payroll solution.

I can see how infuriating it is to deal with incorrect wage reporting in QuickBooks the QB U/I worksheet. I understand how important to handle and resolve this right away, Ana. 

You might be using the default sick pay item as a compensation type item, which is why it is considered taxable. To fix this, we can set up an addition item and set it as non-taxable sick pay from the employee profile.

Here's how:

1. Go to Employees at the top menu bar and click Employee Center.
2. Select your Employee. 
3. Select Payroll Info from the left menu bar.
4. Add addition item and enter the name for the addition.
   
   
5. In the Tax tracking type, select Non-taxable sick pay.
6. Click Next, until Finish.
    

Then, you can manually adjust the sick hours. Once done, we can delete the wrong sick pay item from the employee profile.

To adjust the sick hours:

1. Go to Employees at the top menu bar and click Employee Center.
2. Select Payroll Info from the left menu bar.
3.  Click on the Sick/ Vacation tab, and from there adjust the sick hours.
   To correct the old payroll data, we can adjust payroll liabilities for employees including the wage base.  Then, we can enter addition item and set it to non-taxable to reimburse the overcalculated taxes for the employee. 
   
   

You may also check out this article about handling overpaid taxes: Resolve a Payroll Tax Overpayment.

You’re always welcome here if you have other queries in mind. I’ll be around ready to assist you. Keep safe.

@LeizylM How would I address WA State PFML and the new WA State CARES Act that both require sick pay wages to fall on their own worksheet?

I understand you need a guide on addressing the requirements of the WA State Paid Family and Medical Leave (PFML) and the new WA State CARES Act, which both mandate that sick pay wages be reported on separate worksheets, @Ana M1.

Rest assured, I'm here to assist you in navigating these requirements and ensuring compliance with the regulations. 

In accordance with the guidelines outlined by your State, the report will exclusively exhibit the regular hours without a separate column for Sick Pay. Nevertheless, please note that the tax has already been deducted.

May I request screenshots of the worksheet for the WA State PFML and the new WA State CARES Act, particularly the sections that involve the reporting of sick pay wages? Any additional information you can provide would be greatly appreciated. We aim to ensure that we offer you precise steps and accurate information to resolve this matter.

Finally, let me add the following articles to help manage Washington Paid Family and Medical Leave and Set up Washington Cares Fund payroll tax: 

• How the Washington Paid Family and Medical Leave program works
• New WA Cares Fund.

If you have any further questions, please don't hesitate to let me know. I'm here to assist you and provide any further clarification you may require.

The sick pay is subject to Withholding tax, social security etc.  Federal Taxes.

It is NOT subject to Washington State Unemployment taxes.  You use to be able to select the radial buttons individually for each tax.  Now it's automatically selected and you can't change it.

We still need to track the sick pay accrual and use for each employee.  The employer is mandated by the state of washington to provide 1 hour for every 40 hours work of sick pay accrual.  We can't just go in and change the hours and even if we did, that would not change the wages earned for each employee.

You do not grasp the issue.  Your answer isn't helpful.

Sick pay is taxable for all but the state of washington unemployment taxes.

It would be inappropriate to alter the accrual and use of sick pay since the employer is mandated to

provide and track sick pay

@CindySue  Agree, this answer does not appear helpful because it sets the sick wages aside for one state program but not the others - how would the others accrue separately and not duplicate on the Payroll Summary?  It appears it would over-report wages on the Payroll Summary as two line items (Sick Pay and Sick Hourly for example).  I may have to play around with this for a while and see if I can get it to work as an "addition" item and not an "earnings" item.  Too bad they took away the option to de-select the taxes check box in the payroll item set up.  It was so simple!!

There is a very simple solution.  Give us back the power to set up Sick pay as it use to be with radial buttons to pick on whether it's subject to State unemployment taxes, or not. 

All the options no longer exist when we set up sick pay.  The only solution is to override the amount on the state form to reflect  the wages net of the sick pay.  Oddly enough, the hours are correctly reflected and do not include the unworked sick pay hours.  

By the way, we can not use your suggested Addition:Non-taxable sick pay because the sick pay is taxable for the 940, 941 etc.  The employees DO NOT contribute.  The sick hour accruals are mandated by Washington state law.

You are welcome to reach out to this network of on the ground accountant users of the software in Washington state.  We have to know the law and to know the product.

TO all the quickbook advisors- YOU ARE NOT LISTENING TO ANY USER ON HERE! OR UNDERSTANDING WHAT ANYONE IS SAYING!  

I legit have turned off a lot of 'automatic' tax options in qbo and built separate payroll items/deductions and built a spreadsheet based off the state's actual math to make sure my payroll is calculating correctly.  Mind you I did not do this alone, I had the aide of a fellow coworker and our cpa go over it all together so we knew this was in fact working as supposed to.  In essence, going back to old school, hand entering the state deductions.  Then at quarterly we know for fact when we go to the state website that we are reporting everything we are supposed to report and nothing we aren't and everyone's checks are in fact issued correctly.  This has nothing to do with people updating their systems- especially if you are working in online- as it is supposed to in theory update automatically.  The problem lies in the CODING of QUICKBOOKS! Whoever codes does not have a grasp of accounting in my opinion and does not check their work- which would be easy if they took their math over to the state websites and checked against them.  

I agree with every user on here that says- give the people back their control- these work arounds are getting ridiculous.  If you reach out to help- you get the lame "we understand this is frustrating" preplanned response that you give these poor employees that have no clue what they are doing.  I have said this over and over and over- make online like desktop and give the control back over to the user - we actually know what we are doing.  

In the meantime, for my fellow users- I suggest getting the exact math you need from the state pages and build a spreadsheet and create new payroll items and deductions- yes more work- but quickbooks clearly is not going to listen to us.  Good luck everyone.

Spot on, thank YOU.  It's the QB coding that needs fixed, we should not have to resort to another work around for the amount we pay for QB Desktop/QBO, yearly subscriptions and payroll subscriptions.

The State creates these laws that require complicated accounting and we are left to work with software that needs to be more and more complex to deal with the laws for accruals. For example PFML does not include tips but does include Sick pay;  U/I includes tips but does not include sick pay. I have to wonder sometimes, who writes these laws?  But I digress...lol

I'm a desktop user but have one client who uses QBO, and thankfully they're an owner-employee and they are not subject to U/I.  All my other clients are run through desktop due to the volume of work I do,  QBO is not practical.  So far, this is the only worksheet that does not appear to be tracking correctly.  Thanks for your input!