If you process payroll using one of the QuickBooks
Payroll Services, you cannot remove payroll transactions dated in the current year (based on the date specified in your computer date and time settings) and in the prior calendar year. This is to ensure that you retain an entire calendar year's worth of payroll data for tax purposes.
If the current date is 02/15/16 and you enter 07/31/15 as the end date to remove all transactions dated in your prior fiscal year, QuickBooks retains all payroll transactions dated after 12/31/14 and removes all payroll transactions dated on or before 12/31/14, unless other rules prevent the removal of these transactions.
This ensures that you preserve all of your payroll transactions dated in the 2015 and the 2016 calendar years.
If you use the Assisted Payroll Service, you must also start payroll for the current year before you condense your company file to remove data from prior years. To
start payroll for the current year, write at least one paycheck and send payroll data to the service during the current year.