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Intuit

Troubleshooting amounts in Form 941/Sch. B - Employer's Quarterly Federal Tax Return

Schedule B does not show after filling up the Interview and the 941 form

The schedule B form lists your 941 tax liabilities for each paycheck date. You liability includes:

  • The federal income tax you withheld from your employees' pay, and
  • Both employee and employer social security and Medicare taxes.

Schedule B is not used for listing your federal tax deposits.

Who must file Schedule B? You need to meet the following requirements in order for you to qualify filing Schedule B, otherwise, Schedule B will not show even after completing the Interview and the 941 form boxes.

  • You are a semiweekly schedule depositor.
  • You accumulated a tax liability of $100,000 or more on any given day in the quarter.

Form 941 line 2 does not match adjusted gross wages in Payroll Summary report

 

The Adjusted Gross Pay in your Payroll Summary report does not match the wages reported on Form 941, line 2 (wages, tips, and other compensation).

What is Line 2 of the 941?

Line 2 is Wages, tips and other compensation.

Line 2 is comprised of Total Gross Pay plus any gross pay additions (i.e., tips), any company contributions that are taxable to federal withholding, (i.e. taxable GTLI, company car), minus all pretax deductions (i.e., 125 plans and 401(K)).

If you double-click on the total amount for Federal Withholding on the Payroll Summary report and scroll to the bottom, the amount in the Income Subject to Tax column should match Line 2 of the 941.

  • Assisted Payroll 941/944 Forms do not include GTLI amounts on Line 2. GTLI isn't taxable to federal withholding at the paycheck calculation (the Tax Tracking Type of Taxable Grp Trm Life doesn't have the taxability check mark set on the Payroll Item in QuickBooks Desktop). As a result, this doesn't get sent to the payroll service correctly for the GTLI amounts to be reported. If you see an error on your form that requires correction or amendment, contact Intuit for assistance.

This discrepancy can occur because:

  • You have Company Contribution Items (for example, fringe benefits, S Corp, GTLI) that were reported on Form 941 line 2.
  • Payroll items are set to calculate using gross pay in the payroll item setup.
  • Incorrect tax tracking was used for a payroll item.

To determine what is causing the wage discrepancy:

  1. Create a Payroll Summary report for the quarter in question.
  2. View all of the payroll items reported in Deductions from Gross Pay. If any of these items should not be listed here, you must move them to Deductions from Net Pay. (For example, an employee 401(k) loan should not be listed as a deduction from gross pay.)

    To change how payroll items are reported in the Payroll Summary report:

    1. Choose Lists > Payroll Item List.
    2. Double-click the item that is reported incorrectly.
    3. Click Next until you get to the Gross vs. Net window.
    4. Select either gross pay or net pay, depending on where you want this item reported on the Payroll Summary report.
      • Note: If you change the Gross vs. Net setting and you are using a percentage in QuickBooks Desktop, this changes the way QuickBooks Desktop calculates the payroll item on paychecks. If you do not use a percentage, this change does not affect payroll.
    5. Check if there are discrepancies in the tax amounts.
  3. View all the payroll items in Employer Taxes and Contributions. Company contribution items that affect Form 941 line 2 are not reflected in Adjusted Gross Pay. Add or subtract amounts as needed.
  4. If all payroll items are reporting correctly in the Payroll Summary report, incorrect tax tracking for a payroll item might cause the discrepancy. (For example, an employee 401(k) loan has a tax-tracking type of 401(k). This is incorrect and should be reported as None.) To verify that all payroll items are set up with the correct tax tracking type, run a Payroll Item Listing report.

    To create a Payroll Item Listing report:

    1. Choose Reports > Employees and Payroll > Payroll Item Listing.
    2. Check the Tax Tracking Type in the column on the right.
    3. If the payroll item has an incorrect tax tracking type, you might need to file amendments for the affected quarters.

     

941 Line 10 is not equal to line 16

 

When you click the Check for Errors button on 941 form and receive the following message:

Error on Form 941: Total taxes adjusted by EIC does not equal the total quarter liability on page 2. You must make necessary adjustments to reconcile the amounts. If you have Hire act qualified employees, please check and adjust your data for any errors.

Line 10 is calculated using percentages (Social Security and Medicare) of the employees' wage bases - in addition to the Federal Withholding amount on the employees' paychecks and liability adjustments.

Line 16 is based on the total amount of Federal Withholding, Medicare Employee, Medicare Company, Social Security Employee and Social Security Company on the employees' paychecks and liability adjustments.

Line 10 may be incorrect due to:

  • Incorrect Payroll Item setup
  • Incorrect Payroll Liability Wage Base adjustments
  • Incorrect or unnecessary Federal Withholding adjustments
  • Incorrect YTD entries

Line 16 may be incorrect due to:

  • Incorrect Payroll Liability amount adjustments
  • Incorrect taxes entered on Year-to-Date Payroll entries
  • Taxes were incorrectly edited on employee paychecks
  • Tax tables were outdated during paycheck creation
  1. Ensure that your Payroll Items are set-up correctly.
  2. Run a Payroll Check-up to correct your wage amounts.
  3. Run the 941 again and verify that the amount on Lines 5a, 5b, 5c, and 5d are now correct. If they are still incorrect, some of your Payroll Items are still set-up incorrectly.
  4. Proceed with the steps for If Line 16 is incorrect below.
  1. Click the Reports menu at the top bar, select Employees & Payroll, and choose Payroll Detail Review.
  2. Make sure that the Dates near the top are set to the affected quarter.
  3. Click Customize Report, and click the Filters tab.
  4. On the Choose Filter window, select Payroll Item.
  5. On the middle window, click the drop-down arrow and select Multiple Payroll Items....
  6. Highlight with a check mark Federal Withholding, Medicare Employee, Medicare Company, Social Security Employee and Social Security Company.
  7. Click OK, then OK on the Modify Report window.
  8. On the report, compare the wage base of each employee and multiply it with the tax rate to get the correct amount. Compare that with the amount from the amount column.Example:Payroll Detail Review ReportSocial Security Company
    Date Wage Base Tax Rate Amount $
    1/10/2012 1692.31 6.2% 104.92
    1/24/2012 1692.31 6.2% 104.93
    2/07/2012 1692.31 6.2% 0.00
    2/21/2012 1692.31 6.2% 209.85
    3/07/2012 1692.31 6.2% 0.00
    3/21/2012 1692.31 6.2% 0.00
    Total 10153.86 419.70

    Formula: Wage base * 6.2% = Amount10153.86 * 6.2% = 629.54

    In the above example, the total amount is different from the correct amount (based on the wage base).

  9. Create a Liability Adjustment for the difference. (In the above Example: 629.54 - 419.70 = 209.84. Therefore, the Liability adjustment is 209.84).
    1. Click the Employees menu at the top bar, select Payroll Taxes and Liabilities and choose Adjust Payroll Liabilities.
    2. For the Date and Effective Date, select the end of the Quarter which you are creating a 941 form for.Note: If you are filing schedule B, use the last paycheck date of the quarter for the Date and Effective Date to avoid error on the form (which may happen if there are no amounts on the end of quarter.)
    3. Under Adjustment is for choose Employee and select the Employee Name from the drop-down menu.
    4. Under Item Name, select the Federal Tax(es) that you are creating an adjustment for (in the above example, Social Security Employee).
    5. Under Amount, enter the amount difference that was computed in step 9.
  10. Repeat steps 8 and 9 for each of your employees.
  11. Reopen your 941 form and verify that Line 14 is correctly matching Line 10.
  12. Create a Liability Check to pay the amount due on Line 11.

If the amount of Social Security Employee and/or Medicare Employee was incorrect, refund or withhold the amount difference from your employees.

 

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