Payroll liabilities in QB Desktop

QB took an extra amount from my Company Paid California UI on one of my employees. How do I correct this in QB and with California EDD? The limit is supposed to be on the first $7,000 each employee

Welcome to this thread, MissAliss.

We’ll have to create an employee liability adjustment to correct the amount. Let me help you on how to accomplish these steps in QuickBooks.

Here’s how:

1. Press the Employees menu at the top and choose Payroll taxes and Liabilities.
2. Then, select Adjust Payroll Liabilities.
3. This will open a page where you can enter all the details about the adjustment.
4. Enter the correct date in the field box.
   **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.
5. Next, tick the box for Employee and click the drop-down to select the worker’s name.
6. In the Taxes and Liabilities section, go to the Item name column and pick CA-Unemployment Company.
7. Put a negative sign for the figure to be adjusted in the Amount field.
8. Use the Memo field to note what happened to the transaction.
9. Press the Accounts Affected button and pick the appropriate option.
   **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.
   **Affect liability and expense accounts to enter an adjusting transaction in the liability and expense accounts.
10. Click OK twice to keep the changes.

Here’s a guide that provides more insights about the process: Adjust payroll liabilities in QuickBooks Desktop.

Now that we’ve corrected your payroll records, I suggest you get in touch with the state agency. Then, inform them about the overpayment. One of their specialists will guide you on how to properly handle the situation and make sure your state tax is in order.

For future reference, this article covers all the steps on how to handle overpayment in payroll liabilities: Record a payroll liability refund check.

Feel free to click the Reply button if you have any clarifications or other concerns. I’ll jump right back in to answer them for you. Stay safe and enjoy your day.

Hello Klent,  Because our Payroll System was down when quarterly Payroll Tax was due, I paid the liability via telephone.  Now the system is up, showing the quarterly liability.   If I follow the above instructions and change the liability amount in Payroll, how will I enter the payments made by phone??  Thank you.

Luapwen

Jumping in to answer your question about recording tax payments, Luapwen.

The steps shared by Klent are also applicable for payments made via phone calls. You can enter a short description in the Memo column of what the entries are for.

If no record has been made for the payments, you can select Affect liability and bank accounts after clicking Accounts Affected. Use this option if you want the prior payment to show up in the bank register automatically. If a check is already recorded or downloaded via Bank Feeds, select Affect liability accounts but not the bank account. Here's a more detailed article for more details: Enter Historical Tax Payments in Desktop Payroll.

You'll also to run these reports if you want to have an overview of the payroll amounts and tax balances: 

• Create a Payroll Summary Report
• Run Payroll Liability Balances Report

As always, don't hesitate to reach out to us or reply down below if you have other questions. We're always here to help and guide you again.