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WYO2021
Level 3

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

I love the E-Payments feature in QuickBooks Desktop to pay our tax liabilities, which works perfectly for 5 payrolls during the quarter; however, since we a bi-monthly, our last pay period of the quarter is paid the first business day of the next quarter. The IRS sees this tax liabilities payment as belonging to the quarter it is paid in when it should go to the previous quarter. This is causing a lot of problems with the IRS sending back valid payments, saying we overpaid. I cannot find anywhere in QB to designate which quarter the payment is supposed to be for (You can choose the quarter in the IRS website EFTPS site) - does anyone know how to correct this, short of making a manual payment at the end of each quarter and by-passing the QB E-payment?

Solved
Best answer September 20, 2021

Best Answers
BigRedConsulting
Community Champion

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

@WYO2021 

RE: The IRS sees this tax liabilities payment as belonging to the quarter it is paid in when it should go to the previous quarter.

and

RE: No matter when I schedule my tax liability payment at quarter's end, it is sent to the IRS AFTER the end of the quarter since our last pay period is the day AFTER the end of the quarter. The payment is sending; however, since there is nowhere to choose the quarter it applies to...

 

There's nowhere to choose the quarter because there is no need to do that. Tax liabilities are based on your payroll date, the paycheck date.  If the pay date for the last pay pay period of the quarter falls in the next quarter (and even the next year for Q4) then it 'belongs' to that quarter, no matter when the employees worked to earn the money.  All payroll earnings and taxes are reported in the quarter paid, not when the pay is earned, and the resulting liabilities and payments are attributed based on that pay date.

 

For example, if your last pay period of Q4 runs from 12/15/21 to 12/31/21 and payday is the first week-day of the next month, which is 1/3/22, the earnings and taxes are reported in Q1, 2022 and so they won't appear on any 2021 payroll forms, including the W-2, since the employees were not paid the money in 2021. The same methodology applies each quarter.

 

 

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6 Comments 6
AileneA
QuickBooks Team

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

Hello, WYO2021. 

 

Thank you for taking to reach out to us here in the Community. Since Community is a public space and this requires pulling your account. I'd like to redirect you to our specialist, so this gets addressed securely. This may require confidential information, and they're the ones who can help us check on what we can do about it. 

 

Here's how:

 

  1. On your QuickBooks homepage, go to the Help menu.
  2. Choose QuickBooks Desktop Help.
  3. Tap the Contact us button. 

 

To ensure that you'll be assisted immediately, I recommend checking our support hours before performing the steps.    

 

Keep me posted on how the contact goes or if there's anything else you need. I'm always around to help you out. Stay safe!

WYO2021
Level 3

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

This is a general question about how to designate a specific quarter for tax liability payments. Is it possible in QB Desktop?

Charies_M
Moderator

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

I appreciate you for coming back and emphasizing your concern, WYO2021.

 

Since the tax liability payment is incorrect, you'll want to change the tax payment schedule set up in QuickBooks Desktop by following the steps below:

  1. Go to the Employees menu, then select Payroll Center.
  2. Choose the Pay Liabilities tab.
  3. Under Other Activities, select Change Payment Method.
  4. Go to Schedule payments, then select the tax liability you want to edit or schedule a payment for.
  5. Select Edit, then enter the information.
  6. Click Finish, then Finish Later.

You Can also read through this article: Set up and pay scheduled or custom (unscheduled) liabilities. It helps you learn about how to manage scheduled or unscheduled liabilities.

 

Once done, I encourage you to contact our QuickBooks Care Team to guide you with the necessary tax adjustments. Please refer to the steps shared by AileneA to get in touch with us.

 

In addition, I've added these resources that you can use in the future about creating liability adjustments and running its report:

 

To ensure that you have the latest tax table, I encourage visiting this article: Latest Payroll News and Updates.

 

Be sure to message again if you have additional concerns working with tax schedules. We're always delighted to help. 

WYO2021
Level 3

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

I don't think you are understanding the problem. No matter when I schedule my tax liability payment at quarter's end, it is sent to the IRS AFTER the end of the quarter since our last pay period is the day AFTER the end of the quarter. The payment is sending; however, since there is nowhere to choose the quarter it applies to, the IRS is assuming it belongs to the quarter it is paid in, which is incorrect. (It belongs in the previous quarter).

 

Can I designate a quarter when using e-pay through QB Desktop?

ShiellaGraceA
QuickBooks Team

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

Thanks for getting back to us, @WYO2021.

 

I have some information about the scheduled tax liability payment. Liabilities are accrued on the date the paycheck is issued, not on the pay period of the check. In QuickBooks, you'll have to e-pay your tax payment on the last day of your payroll for that quarter.

 

Though, you can directly e-pay your tax payments to the EFTPS (Electronic Federal Tax Payment System) website. Just use the Payroll Liability Balances report to get the total amount for the quarter.

 

Here's how to get the report.

 

  1. On your Home Page, tap the Pay Liabilities icon.
  2. Scroll down towards the Reports section.
  3. Click Payroll Liability Balances.
  4. Change the Dates drop-down to Custom, then the From and To dates. Make sure to include the last payroll date.

From there, you'll know your payroll balance for the quarter.

 

After paying, record your payment in QuickBooks under Create Custom Payments. Check out this article for the detailed steps: Set up and pay scheduled or custom (unscheduled) liabilities.

 

I'm also attaching this link here in case you need help in filing your tax forms: Set up your Federal Forms 940, 941, and 944 for e-file in QuickBooks Desktop.

 

Keep me posted if you have follow-up questions or concerns with e-payments. I'll be here for you. Have a wonderful day ahead.

BigRedConsulting
Community Champion

Bi-Monthly Payroll Tax Payments At End Of Quarter Posting To Wrong Quarter with IRS

@WYO2021 

RE: The IRS sees this tax liabilities payment as belonging to the quarter it is paid in when it should go to the previous quarter.

and

RE: No matter when I schedule my tax liability payment at quarter's end, it is sent to the IRS AFTER the end of the quarter since our last pay period is the day AFTER the end of the quarter. The payment is sending; however, since there is nowhere to choose the quarter it applies to...

 

There's nowhere to choose the quarter because there is no need to do that. Tax liabilities are based on your payroll date, the paycheck date.  If the pay date for the last pay pay period of the quarter falls in the next quarter (and even the next year for Q4) then it 'belongs' to that quarter, no matter when the employees worked to earn the money.  All payroll earnings and taxes are reported in the quarter paid, not when the pay is earned, and the resulting liabilities and payments are attributed based on that pay date.

 

For example, if your last pay period of Q4 runs from 12/15/21 to 12/31/21 and payday is the first week-day of the next month, which is 1/3/22, the earnings and taxes are reported in Q1, 2022 and so they won't appear on any 2021 payroll forms, including the W-2, since the employees were not paid the money in 2021. The same methodology applies each quarter.

 

 

View solution in original post

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