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Ruthie2
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

I am using QBs Pro 2016 desktop for my small business and run our own payroll (only three employees).  When I pay our monthly 941 tax, I select Pay Liabilities, default to the date range provided, and then select Federal withholding, Medicare Company, and Social Security Company.  When I select Medicare Company and Social Security Company, the Medicare Employee and Social Security Employee are auto selected as well.  This has not been an issue until now . . . .

 

Now with the CARES Act and the ability to defer the employer social security portion, I was hoping to be able to just select the Social Security Employee item without it also auto selecting the Social Security Company item.  OR, I tried to change the amount to pay for the Social Security Company to $0.00, but it will not let me.  By unlinking or changing the amount to pay to $0, I was thinking QBs would track the outstanding Social Security Company payroll liability.  How can I unlink these payroll items or change an amount to pay to $0?   

 

I saw the post on setting up payroll to track deferrals (https://quickbooks.intuit.com/learn-support/en-us/help-articles/track-your-deferral-payments-for-soc...), but it's not clear to me if I now need to use the newly created Cares Co Soc Sec Deferral payroll item instead of the Social Security Company payroll item when recording the company portion of the social security payroll tax.  If this is the case, then I think I need to first create the new payroll item and then go back to the most recently created paychecks and adjust the recording of the social security company payroll tax and apply it to the new Cares Co Soc Sec Deferral payroll item.  Is this correct?

 

Thank you for your help!

12 Comments
Ruthie2
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

I forgot to mention in my post that under Pay Liabilities, I can adjust the amount to pay for the Social Security Company amount to anything other than $0.00.  

 

Looking forward to your help and guidance on how to most easily track the deferral amounts.

Thank you!

MaryAnn_E
QuickBooks Team

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

You’re in the right direction to create a new payroll item to track the deferral tax payments, @Ruthie2.

 

The article that you found has the correct steps to track the tax deferral payments for Social Security tax payments. Before doing so, let’s add the payroll item through the Lists menu for you to proceed to the next steps. Let me show you how to do it.

 

Here’s how:

  1. From the Lists menu, click the Payroll Item List.
  2. Click the Payroll Item and select New.
  3. Select one of the following methods: EZ Setup or Custom Setup.
  4. If you selected Custom Setup in step 3, the Add New Payroll Item dialog box displays.
  5. Select a payroll item type, such as Deduction (shown below), and then click Next.
  6. Type a name for the payroll item. This name will display on paychecks and reports. 
  7. In the following screens, you’ll have to specify the related liability account, tax tracking type, and taxes that will be affected, as well as instructing QuickBooks on calculating the deduction.
  8. When you’re done on completing the remaining screens and click Finish.
  9. Your new payroll item is now ready to add to the records of employees who wish to participate.

 

Once done, you don’t have to go back on the recent paychecks and manually add the new payroll item to the liability check. Then, enter the amount on the company is negative. After that, click Recalculate to correct the amount on the liability check. No need for you to adjust the amount, you can enter the amount of the security company on the new payroll item with a negative amount to offset the deferral.

 

For your reference, you can check this article for detailed steps on how to set up your payroll to track deferrals in QuickBooks: Track your deferral payments for Social Security tax payments.

 

Post again if you have any other QuickBooks questions. I'm always here to help.

 

LH1993
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Did you understand QB's reply?  I am more confused now.  Mine are also linked.  So how do I take the Medicare Employer Credit ????

Ryan_M
QuickBooks Team

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Hi @LH1993,

 

Allow me to clear this up for you. 

 

As my colleague @MaryAnn_E mentioned above, you'll have to create a payroll item for these deferral payments. In case you missed it, take a look at this article: Track your deferral payments for Social Security tax payments. Here you'll find a short description of how the CARES Act tax deferral works, as well as the complete steps on how to do this in QuickBooks Desktop (QBDT). Scroll down to the QuickBooks Desktop Payroll section for details. 

 

Also, you can take your time and open this article: How to set up and track the Employee Retention Credit under the CARES Act. if you're an eligible employer, follow the steps listed. 

 

I'll be around in case you need further assistance. Place a comment below, and I'll be sure to get back to you. 

Ruthie2
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Thank you MaryAnn!

I created the payroll item.  I do not see this item when I select "Pay Liabilities".  You mention that I do not need to go back and update the recent paychecks, but I think I need to do that in order to see the new payroll item for the deferral to show up.  Can you please clarify and explain what to do if I update the recent paychecks in order for the new deferral payroll item to show up in the Pay Liabilities screen?  Thank you!

Mark_R
QuickBooks Team

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

I appreciate you getting back to us and sharing the outcome to the steps provided by my colleague above, @Ruthie2.

 

Allow me to clarify things about tracking deferrals in QuickBooks and help you from there.

 

When creating a payroll item for Deferral, it won't show in the Pay Liabilities tab. Instead, you'll have to add the Deferral payroll item in the Federal 941. This is to ensure that you’ve created a check to pay the tax liabilities.

 

Here's how:

 

  1. In the Pay Liabilities tab, select the Federal 941 from the Pay Taxes & Other Liabilities section.
  2. Select the Deferral payroll item from the Payroll Item drop-down and enter the amount of the 941 tax liabilities you qualify for. You will need to enter the amount as a negative amount. 
  3. Click Recalculate to adjust the liability.1.PNG

I'm adding this article for the detailed steps information: Create a check to pay the payroll liabilities.

 

You might also want to check out this article to learn how the CARES Act affects your payroll: How the Coronavirus Aid, Relief, and Economic Security (CARES) Act affects your payroll.

 

Keep in touch if you need any more assistance with this, or there's something else I can do for you. I've got your back. Have a good day and stay safe.

Ruthie2
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Hi Mark,

 

Thank you for your help.  

 

Is there an easier way to get to the screen shot of the check image that you provide?  As I mention in my original post,  when I pay our monthly 941 tax, I select Pay Liabilities.  From here, the only option is to select the date range.  So, I default to the date range provided and then select Federal withholding, Medicare Company, and Social Security Company.  When I select Medicare Company and Social Security Company, the Medicare Employee and Social Security Employee are auto selected as well.  I then click "Create"and then I finally see the check image that you show in your screen shot.  

 

Once I arrive to the check image, I do not see the "Recalculate" button.  Is that because I am either using 2016 QBs Pro desktop OR I am not using the payroll service?

 

On the check image, it looks like I can zero out the amount for the social security company item under the Payroll Liabilities tab.  Instead of creating and using the new Deferral payroll item, can I just zero out the amount for the social security company item here and then refer to this payroll item to track the deferral amount?

 

If I have to create a new deferral payroll item, when I create the deferral payroll item, do I set it up as a "deduction" or "other tax"?  MaryAnn's reply above indicates Deduction" and the link  for Create a check to pay the payroll liabilities indicates "Other tax".

 

Thank you for your patience and for your step by step guidance.  I appreciate your help!

Rasa-LilaM
QuickBooks Team

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Welcome back to the Community, @Ruthie2.

 

I appreciate you for following the resolution provided by my colleagues and sharing with us the result.

 

When paying the liabilities, the federal taxes will automatically show on the liability check. However, you can manually remove the ones that you don’t want to include.

 

Here’s how:

 

  1. In the Liability Payment check window, choose the Payroll Liabilities tab.
  2. From the list, highlight the amount of the payroll item and then the tax name.
  3. Next, press the Delete button on your keyboard to remove it.
  4. Click the Recalculate button and Save & Close.

You should be able to see the Recalculate button in the Liability Payment window even if you're not using the payroll feature. Let’s change the display settings in QuickBooks to resolve the issue. Check out the Fix screen issues in QuickBooks Desktop guide for the step by step process.

 

Based on the scenario provided, we’ll have to create a liability adjustment for the Social Security Company portion to defer the amount. This process ensures the information for your forms and taxes are correct.

 

Here's how:

 

  1. Go to the Employees menu and choose Payroll Taxes & Liabilities to select Adjust Payroll Liabilities.
  2. This will open the Liability Adjustment window.
  3. Enter the same date as the last paycheck of the affected quarter.
  4. Otherwise, use today's date if you’re working on the current quarter. Please know the Effective Date is used to calculate amounts on your 940 and 941 forms.
  5. In the Adjustment is for section, mark the radio-button for Company.
  6. Navigate to the Taxes and Liabilities section.
  7. Key in Social Security Company in the Item Name column and then type the amount in the Amount field.
  8. Press the Accounts Affected button to choose how you want the amount to affect your records.
  9. Mark the appropriate answer.
  10. Click OK and OK to save the adjustment.
    deferral.png

For more information about the process, let me share the Adjust payroll liabilities in QuickBooks Desktop article. It outlines the instructions on how o correct a payroll liability check as well as links to run the Payroll Checkup tool and Payroll Summary Report.

 

Let me know if you have any other concerns or questions about QuickBooks. I’ll be right here to answer them for you. Have a great rest of the day.

Ruthie2
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Thank you for everyone's help.  I think I finally figured it out.

 

When it is time to pay the deferred amounts in 2021 and 2022, do I go to "Pay Liabilities", select the Deferral payroll item, adjust the amount to pay to 50% for 2021, and then create the check?  

Maybelle_S
QuickBooks Team

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Thanks for getting back to us, @Ruthie2.

 

Yes, you're correct. When you pay the deferred amount next year, you can go to Pay Liabilities. Then, select the Deferral payroll item. From there, adjust the amount to pay and create a check. You can also follow the steps given by my colleague @Mark_R.

 

Just in case, I'll add these articles for future reference:

Please let me know if you have any other issues or concerns. I'm more than willing to help. Have a great day!

ecurryor
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

Hi - another long time QB user here and I happen to be a CPA so I clearlyudnerstand what is supposed to happen. The insturctins entirely SKIP the middle step. How to create a paycheck that puts 6.2% deferred tax into the new CARES PR item and does not put 6.2% in the employer liability????????

 

I created the CARES item and it shows up in the employer section of "Create Paycheck" with $0 while the normal employer social security gets the amt calcualted at 6.2%. i tried manually changing the numbers, but QBs "insists" that we owe the tax NOW for the employee and keeps puting year to date corrections into the employer field. And the "Pay PR Liabiltiies" keeps telling me i owe money for each and every past pay period. do i reallyhave to look at this for the next 2 years?

 

i must beleive that I am using this incorrectly but i can NOT find any instruction how to USE thie item once it is created. Hey QuickBooks - we need help!

ecurryor
Level 1

How to Unlink Social Security Company Tax from Social Security Employee Tax to Track Deferral?

p.s. to the folks at QB Help - please stop copying exactly what is on the help menu into your answers. we are not idiots. just uninformed and need instructions on the missign middle step of how to use this item when creating paychecks.

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