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blcrouse
January 27, 2024
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3rd QTR 941 Taxes not withheld on two employees Liability Adjustment made now 4th QTR 941 showing overpayment for exact amount of liability adjustment from previous QTR

  • January 27, 2024
  • 1 reply
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I use QB Desktop with Enhanced Payroll.  I realized taxes were not withheld for the last week of Sept. 2023.  Two employees had already cashed checks.  I made liability adjustments for those, paid the taxes owed through EFTPS, and filed my 941 for 3rd QTR.  Now trying to file my 4th QTR 941 and it is showing an overpayment for the exact amount of the liabilites that I adjusted in the 3rd QTR.  How do I fix this?  I do not want this to snowball going forward.  Bonus:  I am down to the wire filing my 941 return and e filing my W2's and 1099's and would like to make the correction prior to mailing and e filing returns.  Any step by step help would be much appreciated!

Best answer by JenoP

Thank you for bringing this payroll issue to my attention, blcrouse. I'd be happy to help and share details to help you sort this out.

 

Can you also tell us what effective date you assigned when you created the liability adjustment?

 

Since it was for the third quarter, let's open the adjustment and make sure the dates are correct. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Transactions tab.
  2. Select Liability Adjustments and double-click on the adjustment that you made.
  3. Change the dates to the last day of the third quarter.
  4. Click OK.

 

Next, let's also review the date of the liability check and make sure the dates in the Period section are for the third quarter. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Transactions tab.
  2. Select Liability Checks and double-click on the payment.
  3. Make sure the dates are for the third quarter.
  4. Click Save and close.

 

Now that the liability adjustment dates are confirmed to cover the right quarter, open the Form 941 to see if it's no longer showing an overpayment.

 

Aside from that, you can also run a Payroll Liability Balances report. Then, customize the date to the last quarter to check where the overpayment is coming from. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Pay Liabilities tab.
  2. Click Payroll Liability Balances under the Report section.
  3. Change the date to Last Calendar Quarter.
  4. Review the amount under the Balance column for Federal Withholding, Social Security, and Medicare.
  5. Overpayments will show up as negative.
  6. To drill down the report, double-click on the negative amount.

 

This will give you a list of transactions that are affecting the balance. Just in case there's a duplicate payment, delete it to remove the overpayment in your tax form. 

 

Additionally, here are some helpful resources for more guidance on payroll tax forms:

 

 

Don't hesitate to let me know if you need anything else, blcrouse. The QuickBooks Community is always here and happy to help with any payroll, tax form, or QuickBooks Desktop questions you may have. 

1 reply

JenoP
JenoPAnswer
January 28, 2024

Thank you for bringing this payroll issue to my attention, blcrouse. I'd be happy to help and share details to help you sort this out.

 

Can you also tell us what effective date you assigned when you created the liability adjustment?

 

Since it was for the third quarter, let's open the adjustment and make sure the dates are correct. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Transactions tab.
  2. Select Liability Adjustments and double-click on the adjustment that you made.
  3. Change the dates to the last day of the third quarter.
  4. Click OK.

 

Next, let's also review the date of the liability check and make sure the dates in the Period section are for the third quarter. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Transactions tab.
  2. Select Liability Checks and double-click on the payment.
  3. Make sure the dates are for the third quarter.
  4. Click Save and close.

 

Now that the liability adjustment dates are confirmed to cover the right quarter, open the Form 941 to see if it's no longer showing an overpayment.

 

Aside from that, you can also run a Payroll Liability Balances report. Then, customize the date to the last quarter to check where the overpayment is coming from. Here's how:

 

  1. Go back to the Payroll Center and proceed to the Pay Liabilities tab.
  2. Click Payroll Liability Balances under the Report section.
  3. Change the date to Last Calendar Quarter.
  4. Review the amount under the Balance column for Federal Withholding, Social Security, and Medicare.
  5. Overpayments will show up as negative.
  6. To drill down the report, double-click on the negative amount.

 

This will give you a list of transactions that are affecting the balance. Just in case there's a duplicate payment, delete it to remove the overpayment in your tax form. 

 

Additionally, here are some helpful resources for more guidance on payroll tax forms:

 

 

Don't hesitate to let me know if you need anything else, blcrouse. The QuickBooks Community is always here and happy to help with any payroll, tax form, or QuickBooks Desktop questions you may have. 

B
blcrouseAuthor
January 29, 2024

I checked the date on the liability adjustments and it was 09/30/23 and the period date on the liability adjustment payment was 09/23/23-09/29/23. Are there any other reasons it would be showing as an overpayment on the 941? 

S
SirielJeaB
January 29, 2024

I can assist you in handling the overpayment of your 941 federal form, blcrouse. 

 

QuickBooks Desktop doesn't automatically apply overpayments to the following quarter's Form 941, so we'll need to manually override line 11 of Form 941 to include the credit. I will guide you through the process: 

 

  1. Prepare your 941 form.
  2. Add the credit amount and the amount shown on the 941 form. 
  3. Locate line 11 on the form, right-click the number, and select Override. 
  4. Enter the new amount. The form adjusts the total due or amount of overpayment.
  5. If you want to apply the overpayment to the next return, select Apply to the next return.

 

Alternatively, you can select Send a Refund if you want to receive a refund check.

 

I have also added some helpful articles for your future reference:

 

 

Please let me know if you have further concerns about managing the 941 form. I'm always here to provide assistance. Take care.

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