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evolross
January 2, 2025
Question

How do you record a state unemployment tax underpayment in Quickbooks Online?

  • January 2, 2025
  • 1 reply
  • 0 views

We under paid the state unemployment insurance in 2024 due to not updating the tax rate in the Payroll Settings. Yes I know we made a mistake. We just paid the amount due on the state's website which was the amount owed, penalty, and interest.

 

How do we record this in QBO? 

 

If we simply do a Record tax payments (prior tax history), it adds a payment in QBO, but the problem is QBO doesn't "know" about the underpayment and the amount due. Because QBO successfully paid all the tax payments in 2024 (with the outdated tax rate) it sees any added payments as over-payments and immediately marks them as "Resolve Overpayment" and directs you to request a refund. 

 

The PROBLEM is how to get QBO to understand that there's a tax amount owed. Additionally, this gets more complex because the underpaid amount theoretically should have been coming from employee paychecks too. So how do you resolve that? I just assumed we would pay it as the company since it was our mistake in not updating the tax rate (would be nice if QBO was better about notifying you about this). 

 

BTW, this forum is super buggy. Almost impossible to you. Constantly logs you out and posts red "Authentication Failed" errors. Even after removing the cookies. 

1 reply

FishingForAnswers
FishingForAnswers
January 2, 2025

@evolross  Which state are you dealing with? In each one I've interacted with, the State Unemployment was a Company-side tax, not a tax that came out of the employees' paychecks.

 

And yes, this website is a steaming pile of garbage.

 

Funnily enough, I have more luck with it after I'm 'logged out' when I close the browser; it keeps me logged into the community, but not the actual website.

 

Anyway. I don't know how this is handled with QBO; were it Desktop, it would be a fairly simple payroll liability adjustment, perhaps with a side of Other Expense for the penalties and such.

E
evolrossAuthor
January 8, 2025

It's Ohio and the SUI rate changes at least annually. And upon looking into it further, it seems that employers pay the Unemployment Insurance Tax based on their employee's wages. That may have been where I got confused. It's based on employee wages, but paid by the employer.

 

Yeah I guess we'll just add it as a manual payroll expense rather than try to thread it through QBO's Payroll Tax system.

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