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Fixing combined payroll taxes

Note for QuickBooks Payroll customers

Note for Assisted Payroll customers

If you've combined the tax for state unemployment insurance (SUI) with a miscellaneous state or local tax, you need to adjust your taxes and use separate payroll items to track each tax. For example, if you combined CA-SUI tax at 3.4% with CA-ETT at 0.1% into one payroll item with a rate of 3.5%, you would create a tax for CA-ETT, adjust the SUI and CA-ETT payroll items, and begin tracking the taxes separately.

  1. Create another tax payroll item to track the miscellaneous state or local tax.

  2. Calculate the adjustment amounts for SUI and the other tax.

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

  4. In the Effective Date field, enter the last day of the first quarter in the current calendar year in which the combined tax item was used.

  5. Under Adjustment is for, select Employee.

  6. Click the Employee drop-down list and choose the employee for whom the combined tax was used.

  7. In the Item Name field, choose the SUI payroll item, and enter a negative amount in the Amount field.

  8. On the next line, choose the other tax payroll item for the miscellaneous state or local tax, and enter the same amount as a positive amount.

  9. Ignore the warning that QuickBooks displays about creating a paycheck.

  10. Click the Accounts Affected button and make sure Affect liability and expense accounts is selected. Click OK.

  11. Click Next Adjustment.

Repeat this process for each employee in each quarter, as necessary.

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