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mlee_jmm
April 1, 2024
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Submitting and accounting for child support withholdings

  • April 1, 2024
  • 2 replies
  • 0 views

I need help with setting up the correct flow for child support payments.  We are a new company.

 

The employee's child support is deducted via payroll and is currently going to:

Child Support (Account Type: Other Current Liabilities     Detail Type: Payroll Tax Payable)

 

To submit the withheld money to the state child support agency, what is the correct process, so that the account where the child support is withheld is correctly offset?

 

For the first week, I created an expense account ("Expenses for child support   Account Type: Expenses  Detail Type: Payroll Expenses"), and then cut a check hitting that expense account.  

 

I'm assuming that to be the wrong thing to do, because the "Child Support/Other Current Liabilities" account balance has not been offset by the amount of the check payment submitted to the state already.

 

Please give me detailed steps on what the correct process would be AND please explain how I should go about correcting the current situation, where I printed a check using an expense account I created, and have thus left the Child Support-liabilities account showing a too high balance is still being held, not yet submitted to the state.

Best answer by KimberlyS

We appreciate you visiting the Community, mlee_jmm.

 

I'll add information on how you account and submit child support withholdings with QuickBooks Online Payroll.

 

When paying a garnishment through a check, you'll select the specific account used to track the liability payments. Therefore, the balance from the liability account for child support has not been offset by the payment since you selected the expense account you created.

 

To get this corrected, you can delete the check payment to recreate it without having duplicate entries that can mess up your record. After that, here's how to properly create a liability check:

 

  1. Click on the + New button, then Check.
  2. Choose the vendor from the Payee dropdown and the account you use for liability payments from the Bank Account dropdown.
  3. Key in the Payment date and Check no..
  4. Select the account the child support deduction goes into in the CATEGORY dropdown, then enter the exact amount.
  5. Provide the needed information from the remaining fields and click on Save.

 

You can refer to this article for the detailed process: Pay your non-tax liabilities in QuickBooks.

 

On the other hand, QuickBooks creates default accounts automatically to record your liabilities and expenses. To customize these accounts, consider checking this material for guidance: Change your accounting preferences in QuickBooks Online Payroll.

 

In the future, you might want to review this resource to get valuable insights from your business and employees to better manage your finances: Run payroll reports.

 

Keep us posted if you have additional questions when tracking child support or other related concerns in QuickBooks Online Payroll. We'll be around to help.

2 replies

K
KimberlySAnswer
April 1, 2024

We appreciate you visiting the Community, mlee_jmm.

 

I'll add information on how you account and submit child support withholdings with QuickBooks Online Payroll.

 

When paying a garnishment through a check, you'll select the specific account used to track the liability payments. Therefore, the balance from the liability account for child support has not been offset by the payment since you selected the expense account you created.

 

To get this corrected, you can delete the check payment to recreate it without having duplicate entries that can mess up your record. After that, here's how to properly create a liability check:

 

  1. Click on the + New button, then Check.
  2. Choose the vendor from the Payee dropdown and the account you use for liability payments from the Bank Account dropdown.
  3. Key in the Payment date and Check no..
  4. Select the account the child support deduction goes into in the CATEGORY dropdown, then enter the exact amount.
  5. Provide the needed information from the remaining fields and click on Save.

 

You can refer to this article for the detailed process: Pay your non-tax liabilities in QuickBooks.

 

On the other hand, QuickBooks creates default accounts automatically to record your liabilities and expenses. To customize these accounts, consider checking this material for guidance: Change your accounting preferences in QuickBooks Online Payroll.

 

In the future, you might want to review this resource to get valuable insights from your business and employees to better manage your finances: Run payroll reports.

 

Keep us posted if you have additional questions when tracking child support or other related concerns in QuickBooks Online Payroll. We'll be around to help.

    C
    Chipster12
    September 10, 2024

    I also  have a child support  deduction but the State of Florida allows a $5.00 fee along with

    each deduction as income to our business as income. I have the PR deduction set up correctly for the remittance to the State but I do not know how to set up the $5.00 as income. 

    J
    James_AL
    September 10, 2024

    Hello there, Chipster12.

     

    Thanks for providing the information about your concern. Allow me to share the details regarding your situation.

     

    In QuickBooks Online, we are unable to choose an income account for PR deductions (Garnishment), even though it was allowed in your state. You can directly contact our support team to request an adjustment, and they will assist you in setting it up correctly for the future.

     

    I will provide you with the steps on how to contact support.

     

    Here's how:

     

    1. Login to your QuickBooks Online company.
    2. Select (?) Help.
    3. Use the search field to enter your inquiry and search for Help articles, or:
      • Select Contact Us and then choose a topic to connect with the appropriate expert.

     

    Keep us informed if you have any further questions regarding child support or other related matters in QuickBooks Online Payroll. We're here to assist you.

    C
    CCourson
    June 5, 2024

    I have several employees with child support garnishments. Most are paid to the same agency. Should I set each one up with a separate deduction code for each employee? Is this how I would generate a check to pay the liability and have identifiers for each employee referenced on the check? I am a new Quick Book user and trying to set-up Diamond Enterprise 24.

    Thank you

    J
    JoanaC
    June 5, 2024

    Thank you for your prompt response on the thread, @CCourson. Let me share more information about setting up the child support garnishment.

     

    Yes, you're correct. We'll need to set up the child support for each of your employees, as they are giving different amounts. In paying the liabilities, we can create a single check with the total amount of all child support instead of sending different checks to the agency since the garnishment will only be recorded in QuickBooks Desktop.

     

    First, let's set up the payroll item:

    1. Select Lists, then Payroll item lists, and click the dropdown arrow, then New.
    2. Choose Custom Setup, then Next.
    3. Click Deduction, then Next.
    4. Enter the name of the payroll deduction and click Next.
    5. Enter the agency name for which the liability is paid and hit Next.
    6. In the Tracking Type dropdown, leave None and select Next.
    7. In Taxes, click Next.
    8. In Calculate based on Quantity, make sure Neither is chosen and select Next.
    9. In Gross vs. Net, choose Net to calculate the amount for taxes and then hit Next.
    10. Enter Default Rate and Limit if there is one. Please don't forget to add a percentage sign for the percentage and a decimal for the dollar. Click Finish.

     

    To add the Garnishment to the employee:

     

    1. Go to the Employees, then Employee Center.
    2. Double-click the employee's name.
    3. Select Payroll Info.
    4. In the section for Additions, Deductions, and Company Contributions, under the Item name, add the new garnishment item.
    5. In the Amount column, enter the amount per paycheck to take out.
    6. Hit OK.

     

    Moreover, if you want to set up a payroll schedule, refer to this article: Set up and manage payroll schedules.

     

    If you still have questions, don't hesitate to reply to this thread or create a new one. Have a great day.

    C
    CCourson
    June 5, 2024

    Thank you for the response. But I need a little more clarification. Let's say I have two or more employees with child support that is payable to the State of Arizona. If I set them up with the same deduction code of Child Support when the check is generated for the State of Arizona will it show the amounts for each employee separately with their individual case numbers? If so, where does it pull that information from? Or should I set up separate codes, such as Child Support - Smith, Child Support-Jones, etc.? Then would I be able to generate one check to the State with all the info. for each person listed separately?  Thank you.

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