Hello there everyone, I have a question about paying payroll liabilities if they were partially paid one month and the rest is paid later. My client is behind on his EFTPS payments. Example: If he owes $5000 for January, and only made a payment of $2500 today, how do I apply the payment to the balance but still show that there is a balance due for that month? Looking for some help, thanks in advance!
If you are talking about your general ledger balance showing the balance due, the liability would have been recorded in full when the payroll was written, placing the $5000 in the payable account. When the EFTPS payment of $2500 is recorded as a debit to the payable account, your balance will show as $2500 still payable. If you are using QB payroll, this is automatic. If you're recording manually, you make the entries by JE in the month they occur in. The result will be the same. As to the IRS, when your 941 was filed for the first quarter, it should have shown the $5000 liability for January and since the payment had not been made, a balance due for the quarter. When making the EFTPS today or any time, the quarter should be noted as the first quarter. Be aware, there are penalties for late payment that will apply and will accumulate until the balance is paid and the IRS will no doubt, notify you!
If you are running payroll in QB the entries will be automatic in the month that they occur. The $5000 liability will appear as payable in Jan and the EFTPS payment will appear as a debit in the month that it was paid. Your general ledger would then reflect the $5000 due from January until the payment was made at which time the balance due would show as $2500 in the liability account. The IRS will know the balance is due when the 941 is filed showing the liability in Jan and the short payment which will be due with the return. To the best of my knowledge, when you make the EFTPS payments, no matter when you make them, you are able to indicate to which quarter they apply, so making EFTPS payments in a later quarter will still apply to the short payment if you correctly mark the payment at the time it is paid.