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Fixing company-paid payroll taxes

Note for QuickBooks Payroll customers

Note for Assisted Payroll customers

If an employee's total for a company-paid tax is incorrect for a calendar quarter, you need to create an employee liability adjustment for the amount of the discrepancy. For example, you may have accrued too much federal unemployment tax (FUTA) because you were incorrectly using the higher rate.

You need to make a separate adjustment for each affected employee, even though it is a company-paid tax.

  1. Go to the Employees menu, choose Payroll Taxes and Liabilities, and then click Adjust Payroll Liabilities. Shortcut

  2. In the Effective Date field, enter the last day of the quarter in which the discrepancy occurred.

  3. Under Adjustment is for, select Employee.

  4. Click the Employee drop-down list and choose the employee whose tax you want to adjust.

  5. In the Item Name field, choose the payroll item you want to adjust.

  6. Calculate the adjustment amount by subtracting the actual amount for this employee from the correct amount. Enter the difference in the Amount field.

    • If the actual amount is greater than the correct amount, enter a minus sign before the amount to make it negative.

    • If you enter a positive amount and a message suggests you make the adjustment on an employee paycheck, click OK to close the message.

  7. Click the Accounts Affected button. The Affect Accounts window appears.

  8. In the Affect Accounts window, make sure Affect liability and expense accounts is selected, and then click OK.

  9. In the Liability Adjustment window, click OK. The Account for payroll liabilities window appears.

  10. Choose an account to which you want to offset the liability, and then click OK.

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