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A
Arianna09
January 21, 2021
Question

FUTA Tax is being incorrectly calculated for corporate officer on form 940. How can I correct this?

  • January 21, 2021
  • 2 replies
  • 0 views
When I run tax liability report for this employee it shows the correct $420 for FUTA as he is exempt from WA SUI so his FUTA rate is higher. However, when I run tax liability report for all employees it only shows $388.60, therefore the 940 form is being filled out incorrectly. It seems to have been correct at some point as QB directed me to pay $623.33 at the end of Q3. I have called several times and no one has a clue.

    2 replies

    M
    MirriamM
    January 21, 2021

    Hi there, @Arianna09. Thanks for the detailed information about your concern.

     

    To get this sorted out, let's start with checking your employee's profile, as the system will automatically accrue FUTA liability based on your setup.  

    1. In the left menu, tap Payroll, then, go to the Employees tab.
    2. Choose an employee, then click to open the profile.
    3. Tap the Pencil icon next to Pay.
    4. Click the Pencil icon under What are Employee's withholdings?.
    5. In the tax Tax exemptions section, put a checkmark in the SUI box.
    6. Hit Done.

    Once done, when running the report, ensure that the dates filtered when pulling up the tax liability report for the employee and all employees are the same. 

     

    To help check the payroll taxes calculated, you can run the Payroll Tax and Wage Summary report to verify the employee's wage.

     

    Visit also below links to know more about how FUTA works:

    If you have further questions about payroll, feel free to get back to me. I'd be more than happy to answer it for you. Have a nice day.

    A
    Arianna09Author
    January 22, 2021

    Thanks for your reply. However, this does not exactly help. The employees settings are correct. I can see the correct FUTA was calculated when I run the Payroll Tax and Wage Summary. It shows total is $694.97 for last year (2020). I paid $623.33 at the end of the 3rd quarter as QB instructed me to at the time.

     

    The problem is when I view the 940 form it shows only $316.96 is due (this would be correct if this one employee was not exempt from SUI). It also shows I have only deposited $388.60, I believe it is showing this because QB auto adds a credit of $234.73 for 940. I have deleted this credit but then it automatically adds it again. 

    A
    Arianna09Author
    January 22, 2021

    Thanks for your reply. However, this does not exactly help. The employees settings are correct. I can see the correct FUTA was calculated when I run the Payroll Tax and Wage Summary. It shows total is $694.97 for last year (2020). I paid $623.33 at the end of the 3rd quarter as QB instructed me to at the time.

     

    The problem is when I view the 940 form it shows only $316.96 is due (this would be correct if this one employee was not exempt from SUI). It also shows I have only deposited $388.60, I believe it is showing this because QB auto adds a credit of $234.73 for 940. I have deleted this credit but then it automatically adds it again.

    J
    JonpriL
    January 22, 2021

    Hello @Arianna09,

     

    Since the taxes on your form is still incorrectly, I'd recommend contacting our Payroll Care Team. With their tools, one of our specialists can help you with the payroll correction. To do so:

    1. Go to Help.
    2. Select Contact Us.
    3. Enter Incorrect Tax Amount in the What can we help you with? field.
    4. Click Continue.
    5. Choose a channel where you wish to connect with our dedicated support.

    On top of that, I've got you this helpful article for guidance in preparation for the 2020 tax season: QuickBooks Online Payroll Year-end Checklist.

     

    If there's anything else that I can help you with, please let me know by leaving any comments below. I'll be here to lend a hand.

    A
    Arianna09Author
    January 22, 2021

    I've contacted support and didn't get very far. The first four agents had no idea what to do. The last one I spoke with seemed to understand the problem, but after speaking with the backend she said "the system is designed somehow that for FUTA client's are eligible for the credit" so it's applying the lower rate to all employees, including the one that should have a higher rate. She said they are waiting for updates from operations and suggested I fill out the form manually outside of QuickBooks and had no idea when it would be corrected.

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