QB Payroll Error

[Burke]

How to fix this?

In-house bookkeeper paid employee in April 2013 showing $100 "Employee SEP Contribution" in error on paycheck. It should have been "Employer SEP Contribution." Bookkeeper found error later in year, and went back and corrected paycheck. (Not sure how she did this and neither is she.) This resulted in new net pay result, and of course bank account is off. The payroll liability account still shows negative -$100.00, plus negative -$10.00 (federal withholding tax) and negative -$6.00 (state withholding tax) which she has been ignoring all this time. Now 941 and W-2 info is incorrect. Gross wages are off $100. Also, the expense item on the P&L is off by $100 as well (over). The correct amount was sent to the SEP custodian at the end of April. Any suggestions?

PS: The reason this happened is, whoever set up original pay item for employee showed "employee contribution" and that is what comes up automatically every time a paycheck is written. She has to change it to "employer contribution" and this time she didn't. I believe this can be corrected for the future, can you advise the procedure?

[Brilliant]

call QB payroll support, they are very helpful

[geekgirldany]

Okay so the employee cashed the check with the $100 sep contribution deducted. Bookkeeper went back in and changed it to an employer contribution which added back the $100 on the paycheck. Not sure why the $116 would still be hanging in Payroll Liabilites if she changed it. It is hard to give exact instructions without seeing what was done. The employee needs to be repaid the $100 sep contribution, $10 fed tax, and $6 state tax. A check would be written to the employee for $116.00 and in the account break down put Payroll liabilities. Also do an adjustment under Employees, Adjust Payroll Liabs, and put in the amounts to the appropriate Payroll Items. This is affect the liabilities and expense accounts.

I think that would clear up the problem. As I said without actually seeing what was done, I can not be exactly sure. It will be something similar to the above. Of course the Payroll Forms filed for that quarter will have to be corrected.

[Burke]

.

Of course the Payroll Forms filed for that quarter will have to be corrected.

If I refund the $10 and $6 income taxes to the employee, then the only discrepancy on the 941 would be Line 2, total wages paid to employees, since the taxes were not included on the 941. (I need to check that to be sure.) Since the "employee SEP" item was subject to SS/MC taxes, that part is okay. However, because these figures ($100, $10, $6 are all showing in red (negatives), would that work? That's what is throwing me off. Would a journal entry for the $100 to Payroll Liabilities and then from Expense account for SEP Company Contributions take care of that? The expense account is $100 over.