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407Alex
October 17, 2022
Question

Holiday Gifts

  • October 17, 2022
  • 1 reply
  • 0 views

We want to give each of our employees a $250 gift card for the holidays.  We want to give them a physical card so it's more personal than just a bonus on their check.  I understand that per IRS regulations both us as the employer and the employee needs to pay taxes on this gift. How do we track this in Quickbooks? 

    1 reply

    G
    GebelAlainaM
    October 17, 2022

    Welcome to the Community, @407Alex. I'm here to share some details on how we can track a gift made to your employees.

    We can record the gift made to an employee using the in-and-out method. Since the employee already received it, we don't want to increase the net pay of the check. The "in" will add the gift as regular wages so it can be appropriately taxed. And the "out" will be pulling the gift back out of the check since it was already paid. I'll be glad to show you how.

    We can start by setting up an after-tax deduction for the "out" part, enter the amount to 0.00, and an Other Earnings pay type for the "in" part, we can leave it blank. Then let's proceed to the following steps:
     

    1. Go to Payroll, then Employees.
    2. Choose Run payroll.
    3. Enter the amount the employee received in the Other Earnings box.
    4. Click the Edit icon next to the Net pay amount.
    5. From the Employee deductions section, enter the same amount as the current net pay in the other after-tax box.
    6. Select Preview Payroll and then click Submit payroll.
       

    For more details, please refer to this article: Create a zero net paycheck.

    I've also added this article in case you'll want to learn more about how to prepare and file your federal 1099s in the future: Create and file 1099s without payroll.

    I'll be around if you need more help managing your holiday gifts or any other QuickBooks-related concerns. Take care!

    4
    407AlexAuthor
    October 18, 2022

    Hi

    I tried that and got the following error message - "Net pay must be greater than 0. To pay _____, increase the pay or decrease the deductions." 

     

    So does that mean I can only add this as part of an existing paycheck and not by itself?

     

    On another note, how do we process  for 1099 vendors that we want to give a gift card to?

     

    Thanks

     

     

    M
    Mark_R
    October 18, 2022

    Welcome back, @407Alex.

     

    I want to make sure you can create a zero net paycheck for your employee's and vendors' holiday gifts, and I'd like to redirect you to the best support group available to get this addressed right away.

     

    Since you got an error message after following the steps shared by my colleague GebelAlainaM above when creating a zero net paycheck, I recommend contacting our QuickBooks Payroll Team. This way, they can help you check the payroll items used when creating the paycheck. They can also guide you through the process of entering holiday gifts for 1099 vendors. To reach them, you can follow the steps below:

     

    1. Sign in to your QuickBooks Online account.
    2. Click the Help button.
    3. In the QuickBooks Assistance chatbox, select Talk to a human and choose I still need a human.
    4. Select Contact Us.

     

    You may want to run and customize payroll reports in QuickBooks Online. This will help you view useful information about your business and employees.

     

    Our Community team is always open to help you again if you need further assistance with processing payroll. Have a great day ahead!

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