Payroll withholding error

Hi 46Sandy,

Thank you for getting help with your former employee's withholding tax. Let's work together to correct his record so you have accurate figures on year-end reports. But first, please consider backing up your company file before recording anything.

In this case, we'll do an employee negative adjustment for the state withholding tax item and affect the accounts. You'll be asked to choose an affected account in the process.

1. Open your QuickBooks Desktop company file.
2. Go to the Employees menu, then select Payroll Taxes and Liabilities.
3. Select Adjust Payroll Liabilities.
4. Choose the last day of the 3rd quarter in the Affected date field.
5. Select Adjustment for Employee and choose the name of the employee.
6. Select the state withholding item in the table and enter a negative amount.
7. In the table fields, select the state withholding tax, and enter a negative amount. 
8. Select the Accounts Affected and choose affect liability and expense accounts.
9. Click OK. You'll choose a category for the adjustment. 
   
   

As for the reimbursement, you can record it as a regular check and use the same category in the adjustment. Then, you can run payroll reports afterward.

You can also send an amendment 941 form since there are changes to your third-quarter figures. You can refer to this article: File a corrected Federal Form 941 and 940 in QuickBooks Desktop Payroll.

Feel free to go back to this thread if you have more questions in mind. Take care!