Adjust payroll liabilities in QuickBooks Desktop Payroll

Fix a payroll item with the wrong tax tracking type

Correct YTD wages, taxes, and deduction items

Change the amount for company contribution items such as HSA or 401(k) company match

Run a payroll check-up (QuickBooks Desktop Basic, Standard, and Enhanced Payroll only). If you need to run a payroll checkup for a previous year, you must change your computer's system date to the last day of that year.

Run a payroll summary report for the month or quarter you need to adjust. Take note of the amount of Payroll Items that need adjustments.

Go to Employees, then Payroll Taxes and Liabilities. 

Select Adjust Payroll Liabilities.

In the Date and Effective Date fields, select the last paycheck date of the affected month or quarter.

In the Adjustment is for: section, select Employee Adjustment to correct your employee’s YTD info. Then select the employee's name. Do this even if the item being adjusted is a company-paid item.

Under the Item Name column, select the payroll item you want to adjust.

Enter the Amount of the adjustment. If the item is under-withheld, enter a positive amount to increase. If the item is over-withheld, enter a negative amount to decrease.

Enter the amount under the Income Subject to Tax column if you need to make a wage base adjustment.

Under Memo, enter a note about the adjustment for reference. 

Select Accounts Affected, then OK.

Select OK to close the Affect Accounts window.

Select Next Adjustment if you have additional employees to enter an adjustment for. Otherwise, select OK to save the changes.

Run the payroll summary report again to check if everything is correct.

Run the payroll liability balances report to check if the amounts to be paid are correct.

If your taxes are underpaid, check out Resolve a payroll tax underpayment.

If it’s overpaid, check out Resolve a payroll tax overpayment to learn how to handle them.