Payroll Liabilities State 941 "Overdue"

NicoleFeng · ‎May 22, 2020

For the first Quarter of State Unemployment filing, we entered the rate before the end of last year and hoping all number can be calculated right. However, it was still wrong because Quickbook can not do "if #<#" figure. So basically, we suppose to go with a lower rate base on total unemployment we withheld. but by the time we needed to pay for the state 941, we could not change manually change the rate for the past quarter. We ended up paying the amount by check and manually entered the total number when we do "pay liabilities". Of course they shows a balance/overdue for that quarter. How can we get ride of that without messing up with the following quarter? Thanks.

JenoP · ‎May 22, 2020

Hi there, NicoleFeng.

You can create a liability adjustment to correct the amount of state unemployment and remove the overdue amount as well. Here's how:

Go to the Pay Liabilities tab under the Payroll Center.
Click the Adjust Payroll Liabilities link in the Other Activities section.
Select the last date of the first quarter in both Date and Effective Date fields.
Select Employee in the Adjustment is for and select an employee.
Look for the state unemployment item under the Item Name column.
Enter a negative amount in the Amount column for the difference between what was calculated and what should be the correct one.
Click Next Adjustment to proceed to the rest of the employees.
Click OK once done.

However, that would affect the amount for the succeeding quarter since QuickBooks calculates the amount on a year-to-date basis even if you're paying the state unemployment quarterly.

Although, the program has an auto-correct feature, which means it will try to catch up or stop calculating as soon as the annual limit is reached. It's one way of making sure that the total calculated amount for the entire year is correct.

More details about this process are discussed here: Adjust payroll liabilities in QuickBooks Desktop.

Don't hesitate to add a reply below if you have follow-up question. We're always here to help you sort it out.

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JenoP · ‎May 22, 2020

Hi there, NicoleFeng.

You can create a liability adjustment to correct the amount of state unemployment and remove the overdue amount as well. Here's how:

Go to the Pay Liabilities tab under the Payroll Center.
Click the Adjust Payroll Liabilities link in the Other Activities section.
Select the last date of the first quarter in both Date and Effective Date fields.
Select Employee in the Adjustment is for and select an employee.
Look for the state unemployment item under the Item Name column.
Enter a negative amount in the Amount column for the difference between what was calculated and what should be the correct one.
Click Next Adjustment to proceed to the rest of the employees.
Click OK once done.

However, that would affect the amount for the succeeding quarter since QuickBooks calculates the amount on a year-to-date basis even if you're paying the state unemployment quarterly.

Although, the program has an auto-correct feature, which means it will try to catch up or stop calculating as soon as the annual limit is reached. It's one way of making sure that the total calculated amount for the entire year is correct.

More details about this process are discussed here: Adjust payroll liabilities in QuickBooks Desktop.

Don't hesitate to add a reply below if you have follow-up question. We're always here to help you sort it out.

**Say "Thanks" by clicking the thumb icon in a post

**Mark the post that answers your question by clicking on "Accept as solution"

View solution in original post

NicoleFeng · ‎June 03, 2020

Hi Jenop,

It ended up we double paid it. The Quickbook transaction went through, and we sent a check as well. So we have a credit. Which way do you think it will be better to fix? Refund or apply credit to future payment? Just to remind on this, the actual due amount did not match what quickbook generated (cause we set the wrong rate for the first quarter). Either way, how should we adjust Quickbook entry then? thanks

KlentB · ‎June 03, 2020

Hello there, NicoleFeng.

It would really depend on how you'd want to move forward. You can apply it as a credit to a payroll tax account. Before applying a tax credit, I'd suggest consulting your accountant first. This way, you'll be able to find out which account to select so the credit is correctly applied in your tax forms.

Then, we'll need to change the date and the period of the overpayment (liability check) to have accurate data of your quarterly reports. I'll show you how:

Select Employees from the top menu bar, then go to Payroll Center.
Click the Payroll tab, then choose Pay Liabilities.
In the Payment History section, locate then double-click the appropriate liability check to open it.
Make the necessary changes (date and period).
Click Save when you're done.
Select Yes to confirm the changes.

If you want to be refunded, please know that you'll still need to contact the IRS or state agency to get the actual refund. Additionally, we'll have to create a payroll liability refund check, which increases the liability balance since the liability balance became negative. Just make sure that you've already recorded the overpayment before doing it.

In case you'll need to get helpful insights on where you're business stands in terms of employee expenses, we can customize your payroll reports to view this information.

I'll be right here to continue helping if you have any other concerns or follow-up questions. Have a great rest of the day.

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Payroll Liabilities State 941 "Overdue"