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ABC1236
Level 2

Payroll liabilities in QB Desktop

Last month, I paid state and federal payroll taxes online, as I have done previously. But I received an overdue status in Payroll Liabilities. What can I do so that each journal entry for these payroll taxes that I paid last month is properly identified as payment of payroll taxes? It used to work automatically.

 

What is the best way to record the online payments I just made in QB, so that the taxes are recorded as being paid and not overdue? I have never had this problem before.

 

Solved
Best answer September 11, 2020

Best Answers
KlentB
Moderator

Payroll liabilities in QB Desktop

I can help you with that, ABC1236.

 

The most appropriate way of recording the tax payments you've made online is entering them as historical tax payments in QuickBooks Desktop. This way, you'll be able to get rid of the overdue status and ensure that your tax reports are accurate. Here's how to do it:

 

  1. Select Help from the top menu bar, then choose About QuickBooks.
  2. Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
  3. Click Next until you reach the Enter prior payments section.
  4. In the Enter Prior Payments window, select Create Payment to enter all prior payroll tax and non-tax payroll liability payments you've made.
  5. Enter the Payment Date and For Period Ending date accordingly.
  6. In the Taxes and Liabilities field, choose the payroll tax item that you've already paid, then enter the amount.
  7. Select test the Accounts Affected... button, then select the appropriate option on how you want the payment to affect your Chart of Accounts.
  8. Click Next Payment (if you've another payment that needs to be recorded), then select Finish to complete the process.

I've also included an article that will guide you in recording historical payroll information to your QuickBooks Desktop Payroll: Enter Prior Payroll.

 

If you need to track where your business stands in terms of employee expenses, you can customize the payroll and employee reports.

 

As always, I'm just a post away if you have any other concerns or follow-up questions. Stay safe and have a great rest of the weekend.

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5 Comments 5
KlentB
Moderator

Payroll liabilities in QB Desktop

I can help you with that, ABC1236.

 

The most appropriate way of recording the tax payments you've made online is entering them as historical tax payments in QuickBooks Desktop. This way, you'll be able to get rid of the overdue status and ensure that your tax reports are accurate. Here's how to do it:

 

  1. Select Help from the top menu bar, then choose About QuickBooks.
  2. Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
  3. Click Next until you reach the Enter prior payments section.
  4. In the Enter Prior Payments window, select Create Payment to enter all prior payroll tax and non-tax payroll liability payments you've made.
  5. Enter the Payment Date and For Period Ending date accordingly.
  6. In the Taxes and Liabilities field, choose the payroll tax item that you've already paid, then enter the amount.
  7. Select test the Accounts Affected... button, then select the appropriate option on how you want the payment to affect your Chart of Accounts.
  8. Click Next Payment (if you've another payment that needs to be recorded), then select Finish to complete the process.

I've also included an article that will guide you in recording historical payroll information to your QuickBooks Desktop Payroll: Enter Prior Payroll.

 

If you need to track where your business stands in terms of employee expenses, you can customize the payroll and employee reports.

 

As always, I'm just a post away if you have any other concerns or follow-up questions. Stay safe and have a great rest of the weekend.

MissAliss
Level 1

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

Rasa-LilaM
QuickBooks Team

Payroll liabilities in QB Desktop

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.liab.png
  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.

Luapwen
Level 1

Payroll liabilities in QB Desktop

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

JenoP
Moderator

Payroll liabilities in QB Desktop

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: 

 

 

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. 

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