I have a client that has already entered (and paid) the employees for Q4. After talking to them, I learned that several employees had taken time off due to COVID, but the person in charge of payroll didn't set up the correct items (such as the COVID expense/ National Paid Leave EE/ etc. account) for the paychecks to split out the COVID numbers for the credit. In other words, the person paid the employees as normal without regard for the Sick Wages credit on the 941.
What should I do to 1) correct the paychecks to reflect the correct amounts to the employer and 2) correct the payroll liability that shows up on Schedule B of the 941.
I've already tried manually editing the paychecks to add the COVID line item and correct the employer withholdings, but this method ended up making the Schedule B on the 941 off by about $100. Also, my QB copy is up to date
I appreciate the detailed information about your concern. This gives me a clearer picture of what happened to the tax form.
We’ll have to open the Payroll Summary to check if the calculations for your employees’ taxes are correct. Let’s perform a quarterly payroll adjustment for each worker to determine the discrepancy (for all payroll items).
To build the report:
Go to the Reports menu at the top bar to choose Employees & Payroll and Payroll Summary.
Tap the Dates drop-down and pick All to view the complete details about the report.
Click the Print menu and select Print or Save As PDF to keep a copy. You’ll need the information when performing the adjustment process.
Press the Dates drop-down again and pick Custom.
In the From and To fields, type the starting and ending months for each quarter. For example, 01/01/2020 to 03/31/2020.
Hit the Refresh button to see the changes.
Then, click the amount for each payroll item to view the complete details. Next, get the wage base amount and multiply it to the correct rate. For example, the Social Security Employee( 1800.00*6.2%).
Take note of the figure since we’ll check if the one on the report matches.
Pull up the Payroll Summary Report you previously saved and compare the data.
Perform this process on all payroll items.
When you have the complete data, let’s perform the liability adjustment. This is to correct the information displayed on Line 12 of your 941 forms and Schedule B. Perform the recommended steps in this article: Adjust payroll liabilities in QuickBooks Desktop.