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Adjusting payroll liabilities

Last year I got behind on my Federal and State Tax witholding liabilities.  I got caught up through a monthly payment plan.  How do I adjust the payroll liabilities to match my bank register and reconcile my account?

Community Champion

Adjusting payroll liabilities

Go to Employees>Payroll Tax and Liability>Create custom liability payment


Select time period(s) for outstanding and select the amount to pay - create check

QuickBooks Team

Adjusting payroll liabilities

Hi there, @lanaorchid


Thanks for visiting the Community. You can adjust your payroll liability in the Payroll Liability Adjustment window, then set the dates to match it with your bank register. Here's how: 


  1. Go to the Employees menu, then choose Payroll Taxes and Liabilities.
  2. Select Adjust Payroll Liabilities
  3. Use these tips to help complete the fields.
  • Use the same date as the last paycheck of the affected quarter. Use today's date if you’re working on the current quarter.
  • The Effective Date is used to calculate amounts on your 940 and 941 forms as well as the Payroll Liability Balances Report.

     4. Select if the adjustment is for the company or an employee?

  • Select Employee Adjustment if the item you're adjusting is company-paid. It updates the YTD info reported on the employee W-2 form.
  • Select Company Adjustment if you want the balance to be removed from the Payroll Liability Balances Report.

    5. Complete the Taxes and Liabilities fields.

    6. Select Accounts Affected and then OK.

  • Select Do not affect accounts to leave balances unchanged for the liability and expense accounts. The adjustment will only change the year-to-date amounts on your payroll reports.
  • Select Affect liability and expense accounts to enter an adjusting transaction in the liability and expense accounts.
  • Repeat for other employees if you need to, and select OK.


For proper accounting of your books, I'd also suggest consulting an accountant. Refer to this article for more detailed information: Adjust payroll liabilities in QuickBooks Desktop.


For future reference, check out this article to help you learn about reconciling an account in QuickBooks Desktop


Let me know if you have additional concerns. We're always delighted to help. 

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