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nna
Level 1

tax form worksheet for form 940

The tax form worksheet for form 940 for 2020 shows a difference (12,000)between Total Taxed Wages (155,000)and Total Taxable Futa Wages (143,000). It shows  a positive amount showing that taxed wages was in excess of taxable FUTA wages by twice the amount of the National Paid Leave.  .

The reason -the Total Taxable Futa Wages takes Total Payments to Employees (which is the amount after reducing for National Paid Leave) and subtracting National paid Leave Amounts that are in  the section titled "Additional Exempt Payments based on Taxability Settings".  This deducts the National Paid leave twice when determing the "total Taxable FUTA wages.  

I would like to know if this is a bug in the report or if for some reason I have some option checked wrong.

My 940 form actually shows Total Employee Wages including the National Paid Leave and I am under the impression that the National Paid Leave is subject to FUTA.

3 Comments 3
MaryLandT
QuickBooks Team

tax form worksheet for form 940

Let's figure why the 940 worksheet shows a different amount, nna.

 

The form 940 doesn't include National Paid leave. The total taxable FUTA wages is coming from the amount in line 6 or line 3. You can run a report that shows the totals of all payroll items types. 

 

Let me show you how:

 

  1. Run a Payroll Item Listing report.
  2. Filter the report and, in the Columns, clear everything but the Payroll Item and tax-tracking type, then print the report.
  3. Place a checkmark next to any item that has a tax-tracking type.
  4. Run a Payroll Summary report for the calendar year.
  5. Click Customize Report.
  6. Go to the Filters tab.
  7. Under Current filter choices, select Payroll Item.
  8. In the drop-down box in the middle, select Multiple Payroll Items. Check off all the payroll items you marked earlier.
  9. Add together the Adjusted Gross Pay, Total Employer Taxes, and Contributions.

If any of them are incorrect, you need to modify the tax-tracking type. Here's how:

  1. Go to the Payroll Item List.
  2. Double-click the payroll item in question.
  3. Select Next, until you get to Tax Tracking Type.
  4. Correct the tracking type and click Next until you reach Finish.
  5. This will correct the form, but if the taxability changed, run a payroll checkup  to correct the taxable wage bases.

You can also override line 3 by adding the amount by adding the amount paid for National Paid Leave to Line 3 on the 940. And, the same amount in the "QuickBooks has determined" area of the interview page so all balances are correct.

 

I'm adding this link for additional guidance: How QuickBooks populates the 940. It provides information about each line of the worksheet.

 

After preparing your returns, you can start filing them in QuickBooks Desktop.

 

Let me know if you have follow-up questions concerning payroll. I'm always around to help you.

nna
Level 1

tax form worksheet for form 940

I am puzzled by your sentence “The form 940 doesn’t include National Paid leave” at the beginning of your reply.  

My  concern is with the Tax Form Worksheet that shows 940 information and is generated from the More Payroll Reports in Excel option.  It is not with the Form 940 that is filed with the IRS. 

My research  indicates form 940 should include National Paid Leave on Line 3 . 

 

I ran the Payroll Summary report as you instructed and it agrees with the form 940 and does include the National Paid Leave on Line 3-Total payments to employees.  That amount is $174,000 (fictitious number for demonstration purposes).  

I do not think you and I  are focusing on the same issue so I will be more specific. 

The Tax Form Worksheet shows  (fictitious numbers for demonstration purposes).

Total Payments to Employees

168000.00

Exempt Payments - by Tax Tracking

 

19000

Additional Exempt Payments based on Taxability Settings

 

6000

Total taxed wages:

155000.00

Total taxable FUTA Wages:

143000.00

Difference (should be 0.00):

12000

If you click on the Total Taxable FUTA wages the formula shows that the $143,000 is derived by (a) subtracting  the $168,000 (which is an amount after subtracting  $6000 National Paid Leave to employees ) and (b) subtracts the $19,000 which is shareholder medical ins and (c) again subtracts the $6000 National Paid Leave that is in “Additional exempt payments based on Taxablility Settings”.

 

The specific questions relate to this double subtraction for National Paid Leave on the “Total taxable FUTA wages” line of the worksheet.  My research indicates National paid leave is subject to FUTA.  

(1) why does the Tax Form Worksheet show total payments to Employees after  reducing for the National Paid Leave (168,000) instead of the amount that the Form 940 shows on Line 3 which includes National Paid Leave (174,000)?

(2) Why is the National Paid Leave which is being shown in “additional exempt payments based on Taxability Settings” being subtracted at all on the worksheet?

AlexV
QuickBooks Team

tax form worksheet for form 940

Thanks for the additional info, nna.

 

I pulled up my 940 tax form worksheet, compared it to the 940 form and both of them have the same figures. I have some steps to fix why your worksheet and the form are having different amounts.

 

First, you'll want to make sure that both your QuickBooks Desktop and payroll tax table is up-to-date. Then, run the Verify and Rebuild Data in QuickBooks Desktop to see if this is due to a damaged data.

 

Once done, rerun the report again. If the same result, it's best to reach out to our Customer Support Team so they can further check this issue.

  1. Go to Help, then choose QuickBooks Desktop Help.
  2. On the pop-up, select Contact Us.
  3. Give a brief description of your issue, then hit Let's talk.

I've added some links you'll want to check. These will explain more about National Paid Leave and 940:

Keep on posting here if you need anything else. We'll respond as soon as we can.

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