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Reducing your liability for state unemployment insurance

You should reduce your liability for state unemployment insurance in QuickBooks for the current quarter only if:

  • You have at least one employee who has received paychecks accruing state unemployment insurance during the current quarter and who will not receive any more paychecks in the current quarter.

  • An employee has already reached the maximum annual wage base limit for state unemployment insurance DURING the current quarter.

To reduce your liability for state unemployment insurance

Take the following action for each such employee:

  1. Determine the amount of new tax added for the employee for the current quarter by creating a payroll summary report for the quarter. The new tax is near the bottom of the report, in the section for company-paid taxes.

  2. Enter a negative liability adjustment for the current quarter for the employee for company-paid state unemployment insurance. The adjustment should be the same amount as the amount of new tax added.

  3. On your next payment for state unemployment insurance for the current quarter, you will owe less unemployment insurance but you'll owe for the new tax. (The check total won't be affected.)

  4. As a final precaution, run the Payroll Checkup and print the log of the results displayed at the end. Go to the Employees menu and choose Payroll Service Activities, then click Run Payroll Checkup.

See also

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