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jgoppelt
December 16, 2022
Question

How to properly update FUTA credit reduction for CA? Change from .6% to .9%

  • December 16, 2022
  • 1 reply
  • 0 views

Using quickbooks desktop, need to account for credit reduction on FUTA in CA.  When I edit the payroll item it does not show the amount I need to set it to (.9%).  How do I properly account for this?

1 reply

J
JonpriL
December 20, 2022

Hi there, @jgoppelt.

 

The option to update the tax rate of your FUTA credit reduction for the state of California is unavailable. This is the reason why the changes to the payroll item you've made didn't show the amount you needed.

 

You don't have to worry, the wages and additional FUTA amount will automatically appear on your Schedule A form, which is generated when you create Form 940 with credit reduction amounts.

 

And the payment needed will be based on the total amount due reflected on your form 940. Kindly read and use this article to learn more: Federal Unemployment Tax Act (FUTA) Credit Reduction States.

 

If you have any other questions, please let me know by leaving a follow-up query in the comments below. Take care!

J
jmontoyalandscaping
January 4, 2023

when form 940 auto fills it does show me the correct balance owed. My question is.. How do i change the amount owed on the pay taxes and other liabilities page so that it reflects the correct amount from form 940. I use quickbooks desktop enhaced payroll. thank you

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Giovann_G
January 5, 2023

It's great that you've joined this thread, jmontoyalandscaping.

 

I'll help you in matching your liability amount with the balance of your 940 forms.

 

You can create a payroll liability adjustment if the amount owed on the pay taxes and other liabilities is incorrect. Here's how:

 

  1. Go to the Employees menu, then Payroll Taxes and Liabilities.
  2. Choose Adjust Payroll Liabilities.
  3. Tick Employee and then select the employee.
  4. Complete the Taxes and Liabilities fields using the amounts you have in your scheduled liability window.
  5. Tap Accounts Affected and mark the Do not affect account radio button. This is to make sure you don't double your payment record.
  6. Click OK and then OK to close the liability adjustment window.

 

After that, run the payroll summary and payroll liabilities balances report to ensure that the amount and everything are correct.

 

If your unemployment taxes are increased retroactively, then you might see it underpaid. You can use this article to know how to correct the calculation and payments in QuickBooks Desktop payroll: Enter historical tax payments in Desktop payroll.

 

The Community is always available to help you, let us know if you have any other questions. Have a great day.

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