Uncleard Check for an Employee Who Passed Away

I've come to share details and guide you in handling employees' uncleared checks in QuickBooks Desktop (QBDT) Payroll, @rfhj0928.

Based on the state escheat laws (also known as "unclaimed property" or "abandoned property"), you're required to remit or turn over unclaimed property such as uncashed checks to the state. This regulation may vary from state to state, so I'd recommend contacting your agency for rules. You can refer to this article to know more about this: Understanding Escheat regulations for unclaimed wages.

When you're going to reissue a new check which is what you'll give to the state, inform your bank to void the uncashed one. Then, do the same process into your QBDT account to clear the check.  This changes your paycheck records and updates its dollar amount to zero. You may need to make adjustments to balance your books.

Here's how:

1. Go to the Employees menu.
2. Select Edit/Void Paychecks.
3. Change the Show paychecks through/from dates to the date of the paycheck you need to void, then press Tab on your keyboard.
4. Select the check-in question and select Void. 
5. In the pop-up box, enter YES and select Void.
6. Select the checkbox to agree to the terms and conditions of voiding the paycheck.

Then, I'd recommend pulling up a Payroll Summary report. This way, you can get a  quick view of your payroll totals, including employee taxes and contributions. Then, customize it to focus on the details that matter to you the most.

Also, If you need help running payroll or managing your employees, feel free to browse our guides. You can find them on our articles list page. Then, search for an article to help you accomplish your tasks. 

Let me know if you have other payroll concerns or inquiries about handling employees' paychecks in QBDT. You can drop a comment below, and I'll gladly help. Take care, and wishing you continued success.

---Revised---

You can not do that legally.  Contact the persons estate/beneficiary and if that fails, you have to send the check to the state escheatment, where you turn over the check to the state government.  Check with your state for the rules for escheatment

"One of our caregivers passed away and has one check that was never deposited. What would be our options to get the check cashed?"

@Rea_M 

RE: "You'll first have to inform your bank and let the uncashed check be voided. "

Well that would be illegal. Why would you recommend something that's illegal?  What other advise do you have for us on how to use QuickBooks to break the law?

 Step 1. Contact the executor of  the estate and ask them to search for, find, and cash the check. If they cannot find it.....

Step 2 cut replacement check made out to estate of caregiver and deliver to executor. They must advertise publicly requesting all bills and payments be provided.

Step 3 facing the above would be to cut a replacement check to the state unclaimed funds bureau but check on your state rules for length of time for dealing with unclaimed funds. If the heirs ever claim it it goes into the general fund eventually.

In 2 and 3 to cover yourself ypu would, after creating replacements, place a hold on the stale check so that it does not get stolen and cashed by a thief. This you usually can do online but maybe your bank requires a phone call for a stop payment. Stops do expire and most banks won't even cash a check that is a year old. 

@BigRedConsulting @Rustler  read past her first paragraph, @Rea_M does discuss creating the replacement check . Even as  replacement for lost, now that there is an estate, properly the replacement check is made out to the estate and the executor signs as executor (or executrix) it is cleaner for the estate accounting since there is a brand new bank accou t the estate uses as any personal accounts usually get frozen or liquidated to the estate account.

It is just that @Rea_M  has it backwards, I would create the replacement check, even to the state unclaimed funds BEFORE voiding the original whose whereabouts remain unknown

@john-pero 

The thing is, if you void the paycheck then the company and the employee's payroll forms will be wrong. In this case the employee was paid a paycheck before they were deceased. Also, the check exists somewhere, and the employee's estate manager or family may find it. So, voiding it is not appropriate in QB because voiding the check voids the payroll details.

First thing to do, if possible, is probably to figure out if the family has the check or can find it. If so, they can deposit it. Or, it could be replaced and sent to the estate instead of the state.

If in the end a new check will be issued (either for the state or the estate), one thing you can do is create a special net deduction payroll item that impacts no taxes and is not reported (so pick "None" as the tax tracking type) and that can be added to the old paycheck to make it's amount 0.00. Then, write a new check for the state and use the same account used on that new payroll item. This way the payroll part of the check will remain intact.

There is no need for a duplicate check.  An executor has the legal ability to endorse a check made out to the deceased and deposit it in the estate bank account.

And making a duplicate check may move the expense to the current year, rather than when it was originally written (rare but it happens)

But if the heirs cannot find or refuse to cash (happened to us) the check they find then the company is obligated to at some point duplicate the expenditure

One option, and I will defer the legality to others, is to simply change tge bank account the stale check is drafted from to a clearing account. Even though unwashed and presumed lost this preserves the original date of the expense.  A transaction creating a new liability or Accounts Payable that is deposited to the clearing account will allow the creation of a new check to whomever it is required, such as state dept of unclaimed funds without affecting the date or amount of the original lost check. 

Lost, stolen, refusal to cash are identical in treatment other than comfort of sleeping at night knowing that for 90 days the "stolen" check, if cashed, will be redeposited