Top
Fix incorrect state unemployment (SUI) or withholding (SIT)
Article ID: 1000438
Problem
Your employee's paycheck has an incorrect amount calculated for state unemployment insurance (SUI)or state withholding (SIT).
This type of error is usually caused by incorrect employee state tax setup or payroll item setup.
Assumptions
- You have an active payroll subscription.
- You are using the latest QuickBooks release and tax table update.
Expected Outcome
You will be able to resolve the error and correct the wrong SUI or SIT amount calculated on the paycheck.
Details
For state unemployment (SUI) and state withholding (SIT) to calculate correctly on a paycheck, you must correct any error in the setup before creating a new paycheck.
To resolve the error:
Verify state taxes set up for the employee in the Employee Profile:
- Go to the Employee Center.
- Double-click the employee's name.
- Click the Change tabs drop-down arrow and select Payroll and Compensation Info.
QuickBooks 2013: Click Payroll Info. - Click the Taxes button.
- Click the State tab.
- Verify that the following items are set up correctly:
- State Worked / State Subject to Withholding
- SUI is appropriately marked
- Extra Withholding (adding extra withholding will increase the amount collected for SIT)
- Filing status
- Number of allowances
- Before creating a new paycheck, make any necessary changes to the setup.
- Click OK to save and close.
An employee may have zero state withholding and still be correct. If the employee wages are not high enough to meet the threshold based on their allowances, filing status, and pay period, then QuickBooks will not withhold state income tax.
Verify the SUI rate you have in QuickBooks:
- From the top menu bar, choose Lists > Payroll Item List.
- Double-click State Unemployment.
- Click Next > Next to view the rate.
- See instructions on article Change the SUI rate, if it is incorrect.
- Click Next.
Note: By default, QuickBooks marks payroll items subject to and exempt from SUI, according to your state's guidelines. - Click Next.
- ClickFinish.
Verify if the employee had reached the SUI wage base limit:
To verify your employee's SUI wage base, create a Payroll Summary Report:
- Choose Reports > Employees and Payroll > Payroll Summary Report.
- Enter this calendar year-to-date.
- Locate your employee's SUI and double click the accrued amount. This will open a Transactions by Payroll Item report.
- Under the Wage Base column, verify from the wage base total if your employee had reached the limit.
Verify the setup for payroll items used on paycheck:
- From the top menu bar, choose Lists > Payroll Item List.
- Double-click the payroll items used on paychecks: deductions, additions, and company contribution.
- Click Next until you get to Tax Tracking Type window.
Tax Tracking type determines the taxability of payroll item and how it reports on your tax filings. - Read the description to see if the type selected meets your needs.
Note: If you are unsure what tax tracking type to use, consult your accountant or tax advisor. - Edit the payroll item with the incorrect tax tracking type to make it Inactive.
- Create a new payroll item with the correct tax tracking type and use it on any new paychecks.
- If the employee was previously paid with a check that used the wrong tax tracking type, you may need to adjust their year-to-date totals.
To fix a paycheck with the wrong state tax calculation:
If you have not issued the paycheck, delete the paycheck and re-create it.
To delete the paycheck:
- Go to the Employee Center.
- Click the employee's name to bring up list of paychecks.
- QuickBooks 2013: Click the Transactions sub-tab.
- Double-click the paycheck you want to delete.
- On the top tool bar, choose Edit > Delete Paycheck.
- Click OK when the confirmation message appears.
If you have already issued the check to your employee:
If the SIT amount was over or under-collected, adjust it on the employee's next paycheck. You can manually edit the SIT amount (to decrease or increase) in the Preview Paycheck window.
If the SUI amount was over or under-collected, do not edit the amount on the paycheck. To find and fix discrepancies on SUI calculations:
If the SUI amount was over or under-collected, do not edit the amount on the paycheck. To find and fix discrepancies on SUI calculations:
- To find discrepancies, running a payroll checkup is an easy alternative method to reviewing payroll reports. Before you run a payroll checkup, you must save a back up copy of your data file to protect you data in case an error occurs. For steps and details, see Run Payroll Checkup.
- To correct employee's SUI quarter or year to date wage base and tax amount, you will need to do a manual liability adjustment. For instructions see Entering wage base and tax adjustment to correct employee's quarter (qtd) or year to date (ytd) total
If you have tried all the recommended steps in this article yet the calculation error persists, try Verify Data in case you have a data integrity issue.
Related Articles
Determine why State Unemployment Insurance (SUI) is not calculating on an employee's paychecks
How to change State Unemployment (SUI) rate in QuickBooks.
QuickBooks calculates payroll taxes (Social Security, Medicare, FUTA, SUI, SDI) incorrectly
What to do if the paycheck appears to calculate incorrectly.
How to change State Unemployment (SUI) rate in QuickBooks.
QuickBooks calculates payroll taxes (Social Security, Medicare, FUTA, SUI, SDI) incorrectly
What to do if the paycheck appears to calculate incorrectly.
Mary Ann2/19/2013