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H
HBrooklyn
January 11, 2024
Question

Fringe Benefits non populating on W2 under state tax

  • January 11, 2024
  • 2 replies
  • 0 views

 I am processing our W-2s and our state taxable wages do not include the fringe benefit amounts. When looking at the payroll item "Fringe Benefit", it does not include a line for state wages, only federal. I have spent the entire day on the phone with 2 different support agents, it is still not fixed. 

This is NOT an issue of the state taxes being deducted. This is an issue of the wages not being included on line 16 of the W-2s.

2 replies

AlverMarkT
AlverMarkT
January 12, 2024

Hi, @HBrooklyn. I'm here to help.

 

By default, the info on the W-2 form depends on the payroll information that has been set up. Please know that fringe benefits only increases the wages in boxes 1, 3, and 5. Although not required, employers may also choose to include the total in box 14 (marked Other) or on a separate sheet. That said, you'll have to correct the tax tracking type of your payroll item so that the amount reports on box 16. Moreover, correcting the tax tracking type of a payroll item involves adding a new payroll item with the correct tax tracking type, updating paychecks, and inactivating the old one.

For the detailed steps in correcting a payroll item, kindly refer to this article: Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll.

 

After this, let me add this article as a reference in e-filing your federal tax forms in QBDT Payroll Enhanced: E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll Enhanced.

 

Let us know on the situation if the fringe benefits still don't populate correctly on your W-2s. We'll do our best to assist. Take care.

H
HBrooklynAuthor
January 12, 2024

That is my issue, when you choose Fringe Benefits the tax tracking does not show that it will adjust the state wages. It only shows Federal adjustments. See attached. 

 

 

AlverMarkT
AlverMarkT
January 12, 2024

Thank you for the additional clarification and the added screenshot, @HBrooklyn. 

 

It appears that the payroll item you have set up is currently classified as a federal tax tracking type, which means that it will not impact the state-taxable wages on your W-2 forms. For the amount to be reported in box 16, we would need to adjust the tax tracking type accordingly.

 

Please refer to this article for a detailed guide in adjusting the tax tracking type of a payroll item: Fix a payroll item with incorrect tax tracking type in QuickBooks Desktop Payroll.

 

Just a heads up, it's best to consult an accountant for further guidance in selecting the appropriate payroll tax item.

 

We're always here should you have further updates on the situation. Stay safe.

MJoy_D
MJoy_D
January 12, 2024

Hello, @HBrooklyn. 

 

The article provided by AlverMarkT above provides a step-by-step guide on how to correct a payroll item that has incorrect tax tracking in QuickBooks Payroll.

 

W-2 Box 16 is used to report your employee's total state taxable pay, if applicable. You can visit this link to understand each field in a standard W-2 form: Understanding W-2 Forms. 

 

In addition, you can also read this article to learn how to add a fringe benefit pay type to your employee profile and include it in their paycheck: Add fringe benefits to paychecks. This should be added to their paycheck before the end of the year to be reported on your employees’ W-2s. 

 

Here's how you can generate, print, and customize payroll reports to check your employee information, wages, taxes, deductions, and many more: Run payroll reports. 

 

Let me know if you need more information about W-2s or pay types. I'm always here to assist. Have a wonderful day!

H
HBrooklynAuthor
January 15, 2024

Hello- I am aware of how the W-2 works, and how to add Fringe Benefits to an employees account so that it is included on the W-2. Our Fringe Benefit for Personal Use of Auto was set up many years ago, nothing has been changed. It is no longer calculating as part of the state taxable wages (Georgia). When entering a Fringe Benefit, it defaults to only affect Federal tax line items. Is there a way to over ride this and include state as well? It has always calculated correctly for us, this recently changed. 

K
KayePe
January 15, 2024

Thanks for coming back here and for clarifying your concern. Let me share insights about calculating the Federal tax line items and SUI when entering the Fringe Benefit.

 

To answer your question, No. There are no other ways to override and include the state as well. Usually, the reason to experience changes is because of tax tracking type. I suggest checking where Fringe Benefit takes effect. Take note of the check taxes you see in the tax tracking, and after that, click the Default tab. It is to view if there are some changes made. If there are any, follow the steps below to fix this.

 

  1. In Lists, choose Payroll Item List.
  2. For the payroll item incorrectly set up, double-click it.
  3. Add Do Not Use to the end of the incorrect item name to edit the payroll item to avoid using it for future payroll.
  4. Choose Next until Finish appears, then click Finish.
  5. Select the Payroll Item dropdown, and hit New.
  6. Set up a new payroll item for wage, addition, deduction, or company contribution to replace the wrong one. Make sure to select the correct Tax Tracking Type and taxability.

 

If there are no changes to the tax tracking type, updating the tax table in QBDT is needed. It will ensure correct compliance with the tax calculations. Follow the steps below on how:

 

  1. In Employees, go to Get Payroll Updates.
  2. Choose Download Entire Update.
  3. In done, select Update. When the download is complete, an informational window appears.

 

On the other hand, I recommend visiting this article to guide you when e-filing federal tax forms inside QBDT: E-file and e-pay federal forms and taxes in QuickBooks Desktop Payroll Enhanced. 

 

For any questions regarding managing your taxes inside QBDT, reply on the thread. Take care! 

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