Adjusting 941 overpayment in 3Q and underpayment in 4Q

@941problem  When you say "I overpaid a payroll liability on my QB desktop while manually entering an amount.", how exactly did you manually enter the amount?

I ask as the Schedule B is simply a breakdown of payroll liabilities by day in the Quarter.

Unless your manual entry associated with the overpayment involved manually changing the payroll liability amounts, the Schedule B should automatically match the 941 report's totals.

One way in which people frequently make this error is by attempting to use the Write Check function to recognize their payroll tax liability payments, rather than using the Create Custom Liability Payments window under the Employees>Payroll Taxes and Liabilities sub-menu to create a proper Liability check.

@941problem  Ah, forgot to add a bit.

Although you say "...although I applied the overpayment amount to the fourth quarter,..", I'm pretty sure QB doesn't do anything based on you checking a box on the report.

The most straightforward resolution to the issue of the Q4 941 report not recognizing the Q3 overpayment would be to right click on the box for Line 13, 'Total deposits for this quarter--', and add the overpayment to the amount originally displayed. This will fill in the form properly.

Though, I have to wonder why you're filing the Q4 941 form before Q4 is over. Maybe I am not understanding what you're trying to do there.

Hello, 941.

FishingForAnswers is correct. You'll need to record liability payments using the Pay Liabilities instead of the Write Checks feature. If you've used Write Checks, the transaction needs to be deleted and then recreated to record it in the system accurately.

With this, may I ask how you applied the overpayment to Q4? I'm asking this to understand your situation better and provide precise guidance.

Alternatively, we can handle your concern by deleting the adjustment you've created for Q4. Then, generate a Prior payment using Q3's payment date and Q4's ending period to apply the overpayment to Q4.

Here's how you can initiate the prior payment:

1. Go to the Help menu and select the About QuickBooks option at the bottom of the list.
2. Press the Ctrl + Shift + Y buttons on your keyboard simultaneously.
3. Continuously pick the Next button till you reach the Enter prior payments page.
4. Click Create payment. Then, input the Payment Date for Q3 and use Q4's ending date For Period Ending.
5. Complete the rest of the form accurately and choose accounts to affect from the Accounts Affected section. Then, OK. If you're uncertain, you can check with your accountant to ensure you've chosen accurate accounts to be affected by this transaction.
   
   1. Do not affect accounts - if all your accounts in QuickBooks have accurate balances, use this option. The created prior payments will not reflect on your bank register.
   2. Affect liability accounts but not the bank account - if your account has the correct balance but the liability account has an incorrect one, use this option. The prior payment will not display or impact your bank register.
   3. Affect liability and bank accounts - if none of the accounts have an accurate balance, choose this option. It will cause prior payments to show on your bank register.
6. Double-check everything, and once ready, hit Done.
7. Confirm the action by selecting Yes.

For further reference regarding the prior payments, check this link: Enter historical tax payments in Desktop payroll.

Additionally, you may review this article if you need to settle your non-tax liabilities in the program: Pay your non-tax liabilities in QuickBooks.

I'm keeping this thread open if you have something to add regarding your concern with your liability payments or when you need assistance with other parts of your payroll transactions. Just comment below, and I'll address you accordingly.