2020 Form 940 not calculating exempt payments correctly

Thanks for alerting us, @walkupse.

Recently, we’ve received a report concerning form 940 that isn’t calculating exempt payments correctly. We are aware of this issue, and our engineers are now working on a fix.

I recommend contacting our Payroll Support team so they can add you to the list of affected users. That way, you’ll be able to receive updates once the resolution is implemented. Just make sure to connect with them between 6:00 AM prior to 6:00 PM pacific time so you’ll be assisted right away.  

Here are the steps to connect with them:

1. Open your QuickBooks account.
2. Go to Help, then select QuickBooks Desktop Help.
3. Select Contact Us.
   
4. Enter form 940 that isn’t calculating exempt payments correctly” in the box, then press Search.
5. Click the Start a Message button.
   

You can present this investigation number INV-53409 to our support for quick navigation.

I've added this article, so you have a reference once the form 940 is ready to E-file in QuickBooks. It has the information you need to know about the requirements and steps for electronic filing.

Don't hesitate to get back if you have other form concerns. I’m always here to help. Keep safe.

I am having the same issue but the steps you provided to be added to the list of affected users do not work as described.  Please add me to the list of affected users.

Hello there, chadmac.

Another way on how to get in touch with us is through this link: https://quickbooks.intuit.com/learn-support/en-us/contact. Just select the product and edition you have and then enter the investigation (INV) number. Click Continue and you'll be routed to the list you'll want to connect with us. 

Thanks for your patience while we're working on a permanent fix to this issue. Always know the Community is available to assist you with anything else. Take care!

I tried connecting with support via the link provided and unfortunately I was connected to one idiot after another.  The following is the transcript from my chat session.  I am absolutely incensed with the customer service I have received.

I feel like I'm in the twilight zone.  This is absolutely insane.  After being transferred again, I finally ended up with someone who could actually do something and after about another 15 minutes, I was told that I am now (supposedly) on the list and should receive updates.  I am still extremely disappointed with the service I have received.

Hey chadmac,

I will be reaching out to you personally in a private message to guide you in getting this matter resolved. Until then, take care and be safe.

I also found that QB determined a less amount of exempt payment than what it should be.  I just did the override to correct the amount.   That seemed to work for me.   It doesn't make sense why QB is calculating this incorrectly however. 

It appears that the "National Paid Leave" is showing as a negative amount in the exempt payments screen and doesn't show in the Classification. I'll just override and correct the return, however it is disappointing to have to do that. 

For those of you who are manually overriding the negative amounts showing up in the exempt payments section due to the National Paid Leave wages that are incorrectly being listed there, it should be noted that you will also have to adjust line 3 (Total payments to all employees) and potentially line 5 (Total of payments made to each employee in excess of $7,000).

The fact that this issue still has not been resolved is unacceptable.

I also have the same issue - I was on the phone for 5 1/2 hrs today with "support" - no resolution. Escalated the case -

Is this issue resolved for anyone?

Let me make it up to you and ensure 940 forms will have accurate amounts, jlarocque.

I can share an update about the issue. Our Product Team had already fix this and it's recommended to update the tax table to its current release.

The latest Payroll Update is 22104, released on January 28, 2021. Here are the steps to follow on how to download the tax table:

1. Go to the Employees menu
2. Select Get Payroll Updates.
3. Select the Download Entire Update checkbox.
4. Select Download Latest Update.
5. A window appears when the download is complete.

You can also refer to this article for additional information: Latest payroll news and updates.

After upgrading the tax table, you can start filing 940 forms.

If the issue persists, I recommend contacting our QuickBooks Desktop Payroll Team. They can create a case to investigate again the issue.

Keep me posted if there's anything else I can help you with payroll. I'll be around whenever you need additional information about the 940 that isn't calculating exempt payments.

I have the latest payroll update 22104 - and it is still not correct.

I have updated a second time, I have closed QB and restarted my computer ... it still does not work.

The chat "help" is not helping resolve the issue - 

This is ridiculous that the chat and phone "help" do not understand that this is a known issue 

---

@MaryLandT wrote:

Let me make it up to you and ensure 940 forms will have accurate amounts, jlarocque.

 

I can share an update about the issue. Our Product Team had already fix this and it's recommended to update the tax table to its current release.

 

The latest Payroll Update is 22104, released on January 28, 2021. Here are the steps to follow on how to download the tax table:

 

1. Go to the Employees menu
2. Select Get Payroll Updates.
3. Select the Download Entire Update checkbox.
4. Select Download Latest Update.
5. A window appears when the download is complete.

You can also refer to this article for additional information: Latest payroll news and updates.

 

After upgrading the tax table, you can start filing 940 forms.

 

If the issue persists, I recommend contacting our QuickBooks Desktop Payroll Team. They can create a case to investigate again the issue.

 

Keep me posted if there's anything else I can help you with payroll. I'll be around whenever you need additional information.

---

Still unresolved and cannot get support

I need someone knowledgeable with this issue to contact me.

Having the same issue in 2022 preparing the 2021 form 940.  Amount calculating as "exempt" payment is incorrect.

Hi there,dso0216.

I'm here to help share information about your payroll form in QuickBooks Desktop

To start, let's make sure to keep your software up-to-date. This is to ensure you have the latest features and fixes. 

Here's how:

1.  Go to the Help menu and select Update QuickBooks Desktop.
2. Go to the Options tab. Select Mark All and then select Save.
3. Go to the Update Now tab and select the Reset Update checkbox.
4. When you're ready, select Get Updates.

Once done, let's update the tax table to its latest release. Here are the steps to follow on how to download the tax table:

1. Go to the Employees menu
2. Select Get Payroll Updates.
3. Select the Download Entire Update checkbox.
4. Select Download Latest Update.
5. A window appears when the download is complete.

You can also refer to this article for additional information: Latest payroll news and updates.

Once everything is in order, you can now file your Form 940. Then you can always check the statuses of your forms by going to Payroll Center. Check out this link for the complete steps: Check e-file or e-pay status in QBDT.

Don't hesitate to post again here if you have other questions or concerns with payroll forms. I'm always around happy to help. Take care and stay safe!

I am having the same issue, the 2021 940 says Error - "Total of this column does not equal the exempt payments total. The difference is $248. You must make the necessary adjustments to reconcile the amounts."  see attached picture for reference... 

I have updated payroll and quickbooks so please no suggestions of doing that, it is already done. 

I am not sure where quickbooks is calculating the fringe benefits from, is there a way to see what is going into that number on the 940 line 4?

I appreciate the steps you've done to resolve this issue, mtace6012.

Since your tax table and QuickBooks are both updated, I'd suggest reaching out to our Phone Support team so we can investigate this further.

You can contact them through the Help menu.

When you're ready to file the form, you can check this reference:  Check e-file or e-pay status in QBDT.

Keep me posted whenever help is needed. Stay safe!

I am having the same issue trying to file form 940 for 2021 payroll.  It says "QB has determined that you have 3189.48 in exempt payments (See Form 940; Part 2, line 4)."  I really hate it when they respond with "Contact us to fix this - here is how".  If I wanted to explain the problem to 4 different people over the span of 10 hours with no resolution, I would have already contacted you to do that.  Everything is updated, rebooted, and I checked the payroll items to make sure they are setup correctly.  We didn't have any fringe benefits, group term life insurance, retirement/pension, or dependent care payments.  Does anyone know what payments actually qualify for an exempt payment?  Like what kind of stuff should be put into that box?

This isn't the kind of experience we want you to have when filing your 2021 Form 940 in QuickBooks Desktop (QBDT) Payroll, @jaimeoparker. That's why I'm here to share details on the actions you need to help take care of this matter.

Exempt payments are wages you paid that are exempt from FUTA taxes. QuickBooks includes payroll items to track three categories of exempt payments (moving expenses, dependent care, and group term life).

If you have payroll items with the following tax tracking types and any that you've set to calculate before FUTA withholding, QuickBooks includes the amount for that payroll item in the Exempt Payments total on your Form 940.

• Fringe benefits

• Group term life insurance

• Retirement/pension

• Dependent care

• Other

If you didn't have any of the above-mentioned payroll items but still received the error to troubleshoot Part 2 on Form 940, I'd recommend contacting our Payroll Care team. This is because the Community is a public forum, and we'll need to collect some personal information to pull up your account. They can create a case to trigger an investigation and get the issue fixed in no time. Here's how:

1. Go to Help, then select QuickBooks Desktop Help.
2. Select the Contact Us button.
3. Enter a brief description of your concern in the What can we help you with? field and click Continue.
4. Choose a way to connect (Chat or Callback). 

Also, to further guide you in paying your federal taxes and filing the necessary payroll forms (i.e., 940) on time using QBDT Payroll, I'd recommend checking out this article: E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll.

We appreciate your patience regarding this matter. Please don't hesitate to comment below if you have other payroll concerns and questions about filing Form 940 in QBDT Payroll. I'm always around to help. Take care, and I wish you continued success, @jaimeoparker.

I just go off the phone with QB and we determined that I should right click the amount that QB had determined in exempt payments on the interview page and override that number with the Classification Total number. Everything is matching now and I have filed my 940.  

Still an issue this year.  Not sure why the exempt payments are off for some clients and not others.  Going to simply override to correct and move on.  Intuit really needs to look at why this happens, I don't like to override but here we are....

STILL AN ISSUE IN CALCULATING 940 ON 2022 FORMS!!

Hi there, dso0216 and MillyN

Allow me to share and make sure that you're able to file the form with the correct amounts in QuickBooks Desktop Payroll.

The amounts shown on Line 4 (exempt payments) are usually for payroll items that were not taxed for Federal Unemployment Insurance. Fringe benefits, Group Term Life Insurance, Retirement plans, Dependent care, and other exempt payments are all included.

To ensure that the exempt payment is calculated on your 940 forms, we must first correct the payroll items. We'll start by fixing the tax tracking type or Federal Unemployment (FUTA) tax on the payroll item that should be exempt from FUTA.

Here's how:

1. Go to Lists menu, then Payroll Item List.
2. Right-click the payroll item and hit Edit Payroll Item.
3. Click on Next until you get to Tax Tracking Type.
4. Make sure the tax tracking type selected matches the payroll item used. Don’t use tax tracking type Other.
   • If the tax tracking type is correct, go to Step 5.
   • If the tax tracking type is incorrect, select the correct one, then select Next twice, then Finish. 
5. Tap Next.
6. From the Taxes window, review the Federal Unemployment tax.
   • If Federal Unemployment is unchecked, check it
   • If Federal Unemployment is checked, uncheck it
7. Select Next, then Finish.

Once done, you can proceed to the next step (Step 3: Fix your employee wages) outlined in this link: Troubleshoot Part 2 on Form 940 in QuickBooks Desktop Payroll Enhanced.

I've also added this article as a reference if you need to make an adjustment: Adjust payroll liabilities in QuickBooks Desktop Payroll.

Get back to us if you need further assistance with payroll. I'd be glad to help you out. Take care and have a reat day!

I double checked, it is set up correctly. I might add; the amount withheld is incorrect as well. I've verified the payroll summary by tax tracking report is also incorrect.   Line 3 of the 940 has an amount that is none of the amounts on the tax tracking type (subject income column). Line 4 of the 940 has a number that does not match to what was payroll deducted. It appears none of the numbers are correctly pulling from the payroll module.

I know this hasn't been an easy process for you, @MillyN.

Beforehand, I appreciate your efforts in finding a fix to your query. Please know that this isn't the impression we want you to have. I'll route you in the right direction of support to help you sort this out.

Since the amounts of your 940 form are set up correctly upon double-checking, I recommend contacting our QuickBooks Desktop Payroll Support team. They have the tools to investigate this matter safely and find possible fixes to ensure you can file your form with the correct amounts.

Here's how:

1. Go to Help, then select QuickBooks Desktop Help.
2. Click Contact Us.
3. Give a brief description of your issue, then select Continue.
4. Choose a way to connect.
   
   

Please check our available hours so your concerns will be handled promptly.

Feel free to visit again in the Community if you have any other questions about payroll forms or QBDT Payroll-related concerns. I'm determined to help you succeed. Keep safe always.