941 tax overpayment 3rd qtr and underpayment 941 in 4th qtr

kassied · ‎January 31, 2025

I use Quickbooks Enterprise Solutions Desktop and process our payroll with the Quickbooks Enhanced for two separate companies. On 9/30 when paying our semiweekly 941 taxes via EFTPS online, I made one payroll tax payment payment that was correct. Then I made an additional payment of $8775.24 on the same day thinking I had opened up the other company's EFTPS but I didn't, essentially I overpaid the 3rd Qtr 941 taxes by $8,775.24. I noticed this error before the Form 941 for 3rd Qtr was filed and I reported the overpayment on Line 15 and checked the box to apply to the next return. On 9/30 I first entered the $8775.24 liability check by Create Custom Liability Payments. Then I entered a second liability check, the same way, for the correct liability tax payment so that it would show the 3rd qtr overpayment of tax. When we entered into 4th Qtr, on the first federal tax payment/payroll processing I short paid the federal tax liability EFTPS payment on 10/4 the $8,775.24, in hopes it would correctly report the overpayment on my 941 3rd Qtr return and the underpayment on the 941 4th Qtr return clearing them out. On the 4th Qtr 941 form it was showing a balance due of $8775.24 because of the short/underpayment, so I overrode box 13 adding the amount of the 3rd qtr overpayment there so that it had zero balance due on the 941 4th qtr form. I think that is how to handle the 941 3rd qtr overpayment reporting and the 4th qtr underpayment reporting....BUT my Schedule Liability Payment screen is showing the underpayment from 4th qtr overdue and will not go away. I think my issue is because I made the two payment on 9/30 via the Create Custom Liability Payments and I think instead I should have only entered the correct liability payment this way and wrote a check for the overpayment but it seems no matter how I enter this my QB wont recognize the overpayment in qtr 3 and the underpayment in 4th qtr to wash out to zero. I need to correct the schedule payment lability balance it is showing $8775.24 overdue and I also need to confirm how I should report the underpayment on the 941 4th Qtr return, was I correct to override box 13? Please help.

FishingForAnswers · ‎January 31, 2025

@kassied The Create Custom Liability Payment windows tends to work by what you could think of as 'overlapping'.

Try expanding the date range on your $8,775.24 overpayment to include the time period you are effectively 'pre-paying'.

This will let the system know to apply your extra amount to the seemingly outstanding tax balance.

Jessavell_A · ‎January 31, 2025

I commend your efforts and initiatives to find a solution to correcting the overpayment and underpayment in your payroll taxes, Kassied. You'll need to edit the liability period to correct the payment. I'll share more information below.

To compensate for the overpayment in the prior period, you'll need to double-click the liability check that was underpaid. Here's how:

Click on the Employees. Then, choose Payroll Center.
Select the Transactions tab.
Click the Liability Checks.
To offset the overpayment from the previous period, double-click on the liability check that was underpaid.
Revise the liability period to encompass both the duration during which the item was overpaid and the duration during which it was underpaid.
Click Save & Close.
Double-click on the liability check associated with the overpayment.
Edit the liability period to cover both periods (the period that the item was overpaid and the period it was underpaid).
Click Save & Close.

For visual reference, see the image below.

Once done, you'll want to run your Payroll Liability Balances report and review dates starting from January 1 to December 31. This is to check if the total or the balance shows 0.

Also, you'll want to verify the accuracy of your QuickBooks records after any overrides and filings to ensure they match the form details and prevent errors. Thus, I suggest reaching out to your accountant to help you maintain the accuracy of your books.

Additionally, you can view your previously filed tax forms to see your taxes, direct deposit, or other amounts to be debited from your account.

Please keep me posted if you have additional concerns about correcting your payroll taxes in QuickBooks Desktop. Feel free to utilize the comment section so I can communicate and lend a helping hand. Rest assured, you'll receive a prompt response.

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941 tax overpayment 3rd qtr and underpayment 941 in 4th qtr

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941 tax overpayment 3rd qtr and underpayment 941 in 4th qtr

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