Question

Correct State Unemployment Caclulation

Forum|Forum|5 years ago
April 29, 2021
2 replies
0 views

Hello Community,

We set the 2021 state unemployment rate at the beginning of the year. The state subsequently offered us a buy down on the rate which typically doesn't pay to do but this year it did. The new rate wasn't updated into QB until Feb. We had three employees that received payroll checks prior to the new rate that did not receive paychecks after the new rate (which was less than the beginning 2021 rate) so QB did not have a chance to catch up on the calculation. So when the 1st qtr state unemployment report was completed it is less than what QB shows as due by the rate difference for these three employees checks. How do I correct this is QB? Do I need to edit each check so it recalculates it? This seems risky as it may recalculate other taxes that have already been paid. What is the proper way to fix this?

Thanks in advance for your help.

M

Mark_R

Hello there, @overtaxed72.

I'm here to help correct the amount calculated for state unemployment insurance.

Once you update a tax rate (SUI) in QuickBooks, the changes won't reflect on the prior paychecks created. To correct those, you'll need to adjust the payroll liabilities on each of your employee's paychecks. This way, it'll fix the year-to-date (YTD) or quarter-to-date (QTD) payroll info of your employee. Here's how:

Go to the Employees menu, then select Payroll Taxes and Liabilities and select Adjust Payroll Liabilities.
Select Employee Adjustment.
Choose the employee from the list.
Complete the Taxes and Liabilities fields.
Select Accounts Affected, then click OK.
Once finished, repeat the steps for the rest of your employees.

I'm adding this article for the detailed steps and information: Adjust payroll liabilities in QuickBooks Desktop.

After adjusting the payroll liabilities, you'll want to make sure they are updated. You can run the Payroll Summary report to review if everything looks good.

Keep in touch if you need any more assistance processing payroll, or there's something else I can do for you. I've got your back. Have a good day.

O

overtaxed72Author

Thank you, all fixed

L

llpadie

What if your employee calculation was wrong, i.e., took $2.00 for the tax but $4.00 was the correct calculation. This will change the employees bottom line as to what they should have received for their paycheck. Is there away that this will recalculate in the next quarter to deduct that from current pay? Hope I am making sense.

Thanks!

FishingForAnswers

@llpadie That depends on if you're speaking about medicare and social security taxes, or income tax withholding.

If the former, QuickBooks should automatically try to correct the medicare and social security taxes itself.

If the latter, QuickBooks will do nothing. Though, you can always make the adjustment yourself on later paychecks if it bothers you.

Realistically, there are enough paychecks in the year that QuickBooks is not likely to withhold the 'correct' amount for the entire year anyway.

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