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brendacortes
January 25, 2023
Question

401(k) pretax contribution should have been 401(K) Roth

  • January 25, 2023
  • 1 reply
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I processed the payroll for an employee 401(k) contributions as pre tax contributions but they were supposed to be Roth contributions.  I need to make an adjustment before sending out their W-2 however, the proper tax was not withheld for those contributions.  What adjustment needs to be made in order for their W-2 for the year to be correct?

Is this just a journal entry for the employee that will show the contributions but leave the taxes as they were withheld and paid?

1 reply

G
GebelAlainaM
January 26, 2023
Hello there. I'm here to help in correcting your employees 401K contribution in QuickBooks Desktop Payroll.

In this case, we can make a payroll liability adjustment per employee. You'll need to enter the amount for pre-tax 401k negative and positive for 401k roth. I'd be glad to show you how.

Lets start by locating the payroll discrepancies by running a payroll summary report and customize the date of the report base on the information you need. After that, you can proceed with adjusting your payroll liabilities.

  1. Go to the Employees menu, then Payroll Taxes and Liabilities, and select Adjust Payroll Liabilities.
  2. In the Date and Effective Date fields, select the last paycheck date of the affected month or quarter.
  3. In the Adjustment is for: section, select Employee Adjustment to correct your employee’s YTD info. Then select the employee's name.
  4. Under the Item Name column, select the payroll item you want to adjust.
  5. Enter the Amount of the adjustment. 
    If the item is under-withheld, enter a positive amount to increase.
    If the item is over-withheld, enter a negative amount to decrease.
  6. If you need to make a wage base adjustment, you can enter the amount under the Income Subject to Tax column.
  7. Under Memo, enter a note about the adjustment for reference.
  8. Select Accounts Affected, then OK.
  9. Then click OK to save the changes. However, if you have additional employees to enter an adjustment for select Next Adjustment.

Once done, you'll want to run again a payroll summary report to verify if everything is settled.

You can also refer to this article for more details: Adjust payroll liabilities in QuickBooks Desktop Payroll.

If you have any other payroll concerns, feel free to post a reply. I'll be happy to assists you. Have a good one!
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