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Work with payroll taxes and other liabilities

Each time you run payroll, you accumulate payroll taxes and other liabilities to federal, state, local, and other agencies (such as Medicare) according to the agency's deposit schedule.

You can use the Pay Liabilities window to pay payroll taxes and liabilities. After you specify the date range in the Select Date Range For Liabilities window and select the liabilities to pay, QuickBooks creates the checks to pay them and records the transactions in your company file.

What if I'm an Assisted Payroll customer?

If you are using Assisted Payroll, federal and state taxes paid on behalf of your company do not appear in the window. Only liabilities and expenses to other vendors and agencies, such as insurance payments or local taxes, appear in the window.

Creating payroll liability checks

  • Paying payroll liabilities

  • Creating/reviewing the liability check

    Select the Review liability check to enter expenses/penalties option to review each check individually so that you can, for example, add expenses or discounts to the checks you create.

    Select the Create liability check without reviewing option to have QuickBooks simply create checks for all selected liabilities without showing them to you individually. Though we recommend that you preview your checks before you create them, this option can save some time if you do not need to review the checks to enter expenses or discounts. QuickBooks will record the checks when you click Create.

  • Changing the bank account from which the check is drawn

    The Bank Account drop-down list displays the bank from which the check funds will be drawn.

    To write the liability checks from a different account, choose the account from this drop-down list.

    To add an account to this list, choose Add New. In the New Account dialog, enter the requested information, then click OK.

    Important: If you change the bank account for an e-payment, you may also need to communicate this change to the agency to which you send the payment.

  • Adding a memo to a payroll liability check

  • Determining whether checks should be printed or written by hand

    Select the To be printed checkbox to have QuickBooks print the liability checks. If you write checks by hand, clear the checkbox, and enter the check number in the field that appears.
  • Printing checks

Customizing the Pay Liabilities window

  • Changing the sort order of the payroll liabilities

    By default, the liabilities in the Pay Liabilities window are sorted alphabetically by payroll item. To sort the list alphabetically by payee name, or by balance (largest first), select the appropriate option in the Sort By list.
  • Hiding zero balances

    When the Hide zero balances checkbox at the bottom of the window is cleared (the default), the Pay Liabilities window shows all liabilities with activity (positive and negative balances) for the time period.

    When the Hide zero balances checkbox is selected, the Pay Liabilities window shows all liabilities with activity (positive and negative balances) for the time period as well as those that have a 0.00 balance.

    Note: If the liability wasn't used in the specified time period, it doesn't appear, even when the checkbox is selected.

  • Changing the date range (affects Form 941 and Form 940)

    The Show Payroll Liabilities area displays the dates you selected in the Select Date Range for Liabilities window.

    To change this date, choose from the Date drop-down list, or enter dates in the From and Through fields.

    When you pay the liabilities, QuickBooks tracks the payment of those liabilities for this period (regardless of the check date). It can then report payments against liabilities by month or quarter on Form 941 and Form 940.

Verifying payroll liabilities

  • Running a Payroll Liability Balances report

    Click the Payroll Liabilities Report button to generate a payroll liability balances report for the time period specified in the Show Payroll Liabilities fields. To review a list of transactions that contribute to a particular amount on the report, double-click the amount. Click here to learn more about the Payroll Liabilities Report.

Making payroll liability adjustments

Troubleshooting payroll liability processing problems

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