FUTA

@Mw72  There is no need to repay the employee regardless.

Federal Unemployment is not a tax that is held out of the employee's paycheck. It will never affect the amount of the paycheck.

It is a company contribution tax, no different than State Unemployment or the company share of Social Security or Medicare.

The only impact it'll have on your books is making your balance sheet and such incorrect. That is as easy to fix as creating a payroll liability adjustment. This function can be found under the Employee menu, Payroll Taxes & Liabilities submenu.

Correcting your Federal Unemployment (FUTA) tax is my top priority, Mw72. Let's address this issue promptly.

To begin with, let's correct the payroll information for the employee and remove the FUTA taxes by following these steps:

1. Navigate Employees and select Payroll Center.
2. Locate the employee's name and click the Edit icon.
3. Click the Payroll Info tab and select Taxes.
4. Uncheck the box next to Federal Unemployment (FUTA) (Company Paid) and click OK.

Next, we'll generate a negative liability adjustment to offset the FUTA tax liability. Here's how:

1. Click on Employees, and then select Payroll Taxes and Liabilities. 
2. Choose Adjust Payroll Liabilities.
3. In the Date and Effective Date, select the date of the last paycheck for the affected month or quarter.
4. Click the Payroll Item column to choose the correct payroll item in the Taxes and Liabilities section.
5. Under the Adjustment is for section, check the box for Company.
6. Select Federal Unemployment in the Item Name column.
7. Enter the negative amount of the adjustment.
8. Click on Accounts Affected and choose Do not affect accounts.
9. If you have additional employees, click Next Adjustment and repeat the steps for each affected employee. 

FUTA taxes are paid by employers based on the wages they pay their employees and will not affect the amount of the employee's paycheck. For more information on FUTA tax, please refer to the article: Understand Federal Unemployment Tax Act (FUTA) Credit Reduction States.

Additionally, here are helpful resources when preparing your tax forms:

• Year-end Checklist for QuickBooks Desktop Payroll
• Payroll Tax Compliance Links

If you need more help correcting your FUTA taxes in QBDT or preparing your tax forms, please don't hesitate to contact us. We're always here and ready to assist you.

Once I correct this in the tax adjustment, will this take away the payment liabilities for Federal Unemployment that say it is due next month? 

Once I fix the Tax Liability adjustments will this also take away the Federal Unemployment notification that is due next month? 

RheaMaeH,

Unfortunately, this is impossible to generate a negative liability adjustment to offset the FUTA tax liability. Once followed five first steps and you arrive to step #6 (Select Federal Unemployment in the Item Name column.) a warning from QB shows up: "You cannot adjust tax liabilities for taxes handled by the Intuit Payroll Service."

@GW93401  If you are actually paying someone at Intuit's Payroll Service to handle your payroll and payroll tax processing for you, the next step would be to advise them of the problem and have them earn their feed.

If you handle your payroll and payroll taxes yourself using QB and it's still throwing that message, something's gone off the rail with your program.

I appreciate you following the steps first provided by my colleague above, GW93401. This warning will prompt if you're opting to override the amount calculated by the system. However, if there's a need to update the payroll tax amount, you will need to reach out to our Support team. Allow me provide an easy to follow steps to get connected with our live support.  

Here's how to contact our QBDT Payroll Support team:

1. Go to Help, then QuickBooks Desktop Help.
2. Select Contact Us.
3. Please give a brief description of your issue, then Continue.
4. Sign in to your Intuit account, select Continue, and then Continue with my account.
5. You'll receive a single-use code in your email; enter the code and select Continue.
6. Select Have us call you.

In 2025, FUTA taxes will continue to play a crucial role in employer contributions based on employee wages. To gain a better understanding of how these taxes function, including rates and payment responsibilities, I encourage you to check out our blog: What is FUTA tax? Rates, who pays, and how to calculate in 2025.

Additionally, you can run the Payroll Summary report in QBDT, which can provide you with a comprehensive overview of employee wages, taxes, and contributions.

Please let me know if you have any further questions regarding FUTA taxes in QBDT or need assistance with preparing your tax forms. Our team is always ready to assist you.