I was not able to find an answer elsewhere so I am posting here-
I had to correct the check issue date for the few paychecks in periods earlier in the quarter. After doing so I see a transaction was created under liability adjustments. After the quarterly filings were filed my client was notified by the FTB that they underpaid their UI & ETT. This is when I discovered that no UI or ETT taxes were being withheld from any of the checks issued after the Liability Adjustment. Can anyone shed some light as to why the adjustments are created automatically and if they should be deleted and if doing so would throw off the taxes withheld?
Changing a paycheck date will not automatically create liability adjustments.
The only process I can think of that might do that is the Payroll Checkup feature, though I think you have to explicitly allow it to do so.
Under the memo it states Payroll Checkup. I believe you are right. But I dont recall running this checkup or allowing it to adjust liabilities. I will have to look into disabling this feature.
For the previous quarters will just have to pay the difference to the appropriate entities but for current quarter should i delete all lability adjustments that are dated in the current quarter to date? That will resume the payroll taxes being withheld I am assuming.
Well, I'm not sure. There's probably a reason they were entered.
However, if you're sure your data is right without the adjustments, then deleting them is appropriate.