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Experienced Member

Direct Deposit Tax Error and W2 Fix

We have an employee that didn't have $4.59 deducted for local tax.  I paid the local tax with 4th Qtr taxes.  How do I adjust the employee to make the deduction AND ensure a correct W2?  The employee has Direct Deposit.

Thanks for any help you can give me!

Solved
Best answer 01-17-2019

Accepted Solutions
QuickBooks Team

Re: Direct Deposit Tax Error and W2 Fix

Greetings, @Lori4.

 

I appreciate you for asking the Community about correcting your employee's paycheck and W-2 information. Let's work together to resolve this.

 

You will have to create a positive adjustment under the employee's name for the local tax amount $4.59. Let me show you how:

  1. Click Employees.
  2. Choose Payroll Taxes and Liabilities.
  3. Select Adjust Payroll Liabilities.
  4. On the Date field, make sure to select the last quarter's date.
  5. Choose the Employee name.
  6. Enter the item name and the amount.
  7. Click the Accounts Affected button and choose the right option.
  8. Click OK.

 

After creating this adjustment, the employee's W-2 will update and show the correct information.

 

Since the employee's previous Direct Deposit doesn't have the local tax, you will have to create a non-taxable deduction item that you can add on the next paycheck.

 

Here are the steps in creating and adding a non-taxable item on employee's paycheck:

  1. Click Employees.
  2. Choose Pay Employees.
  3. Select the employee name and click Open Paycheck Detail.
  4. Enter the employee pay information.
  5. Go to the Other Payroll Items section and add a non-taxable item. If you don't have it yet, click the Add New.
  6. Enter the -4.59 to deduct this on the employee's payroll.
  7. Continue the prompts.

 

That should add the adjustment and correct your employee's W-2, Lori4.

 

Let me know if you have more payroll questions. I'm still here to provide further assistance. Have a wonderful day!

 

1 Comment
QuickBooks Team

Re: Direct Deposit Tax Error and W2 Fix

Greetings, @Lori4.

 

I appreciate you for asking the Community about correcting your employee's paycheck and W-2 information. Let's work together to resolve this.

 

You will have to create a positive adjustment under the employee's name for the local tax amount $4.59. Let me show you how:

  1. Click Employees.
  2. Choose Payroll Taxes and Liabilities.
  3. Select Adjust Payroll Liabilities.
  4. On the Date field, make sure to select the last quarter's date.
  5. Choose the Employee name.
  6. Enter the item name and the amount.
  7. Click the Accounts Affected button and choose the right option.
  8. Click OK.

 

After creating this adjustment, the employee's W-2 will update and show the correct information.

 

Since the employee's previous Direct Deposit doesn't have the local tax, you will have to create a non-taxable deduction item that you can add on the next paycheck.

 

Here are the steps in creating and adding a non-taxable item on employee's paycheck:

  1. Click Employees.
  2. Choose Pay Employees.
  3. Select the employee name and click Open Paycheck Detail.
  4. Enter the employee pay information.
  5. Go to the Other Payroll Items section and add a non-taxable item. If you don't have it yet, click the Add New.
  6. Enter the -4.59 to deduct this on the employee's payroll.
  7. Continue the prompts.

 

That should add the adjustment and correct your employee's W-2, Lori4.

 

Let me know if you have more payroll questions. I'm still here to provide further assistance. Have a wonderful day!