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    Direct deposit (DD) FAQ

    Article ID: 2001209
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    When should I send payroll?

    Click on your paycheck date to see the last day to send payroll.

    *Holidays cannot be selected.

    Overview

    This article answers some of the most frequently asked questions about direct deposit (DD) for Intuit Online Payroll and QuickBooks Online Payroll.

    Except where explicitly indicated, the term employee can refer to either an actual employee (who receives Form W-2), or to a contractor (who receives Form 1099).

    Details

    Enrollment

    How do I enroll in direct deposit?

    Can I use direct deposit without federal electronic services?

    Yes. However, we recommend that you enroll in e-services to conveniently e-pay and e-file your taxes through your payroll account. There's no additional charge for direct deposit or e-services.

    Bank accounts

    What type of funding account can I use for direct deposit?

    You can only use a standard checking account for your direct deposit funding account (and other electronic services if selected).

    Are direct deposit debits one lump sum or individual amounts for each employee?

    Direct deposit transactions are individual employee debits. You'll see them as separate entries on your bank statement.

    What type of employee accounts can I send direct deposit to?

    Intuit Online Payroll only allows the use of standard checking accounts, savings accounts and some money market checking accounts. Some savings accounts may have a different account number to be used for direct deposit. Employees should consult with their bank on what account number to use for deposits made through Automated Clearing House (ACH).
     

    bank account setup flow insufficient funds authorization form direct deposit cutoff

    Does your service support pay cards?

    Yes. See article NetSpend Intuit PayCard.

    Can I deposit to an employee's money market or money market checking account?

    This depends entirely on the employee's bank. While generally we do not support deposits to standard money market accounts, direct deposit to some money market checking accounts will work. You should ask the employee to contact their bank to verify that their account can accept direct deposits. Note that some banks have restrictions regarding deposits and withdraws from money market checking accounts.

    Can I use a foreign account as my funding account, or deposit to an employee's foreign bank account?

    No. Intuit Online Payroll does not allow for the use of foreign accounts as company funding accounts, nor as a valid recipient account for direct deposit.

    Timing

    What is the lead time for direct deposit?

    The lead time for direct deposit payroll is generally two (2) banking days. This means that the payroll must be approved, and the funds available in your company bank account, no later than 5:00 p.m. PT two banking days before the pay date. For example, if your pay date is on a Friday, the payroll must be approved by 5:00 p.m. PT on Wednesday. However, if either Wednesday or Thursday were a bank holiday, the payroll would need to be approved by 5:00 p.m. PT on Tuesday.
     
    In some cases, a payroll account will be placed on a five (5) banking day lead time for direct deposit. (This will be clearly indicated when payroll is run.) Using the above example, if the pay date is on Friday, an account on a five day lead time would need to approve payroll no later than 5:00 p.m. PT on the previous Friday (assuming there is no intervening bank holiday).
     
    Use our Payroll Send Tool to find the latest date to approve direct deposit for a scheduled pay date.

    What happens if I approve a direct deposit check after the cutoff time?

    The transaction will process the following banking day.

    For example, if you approve a direct deposit payroll at 5:20 pm PT on Wednesday, it will be processed just after 5:00 p.m. PT on Thursday and posted to the employees' accounts on Monday. (This assumes there is no intervening bank holiday.)

    How far in advance can I create direct deposit paychecks?

    You can create direct deposit paychecks well in advance of the pay date. You can also more than one direct deposit payroll at a given time. This can be a convenience if you're travelling or otherwise unable to access your payroll account for an extended period. Note that for each payroll you create in advance, the funds will still be withdrawn two (2) banking days before the pay date.
     
    It's important that you create payrolls in sequence (with the earliest pay date first). Also, running a large number of payrolls in advance can make it more difficult to make any changes later. Use this flexibility with discretion.

    What happens if I create my direct deposit early?

    Regardless of when you create your direct deposit payroll, the funds will still be withdrawn the same 2 business days prior to the check date. Take caution when creating direct deposit early, as this may lead to incorrect tax calculations if the payrolls are created out of order.

    If I run direct deposit on a weekend or holiday, when will it be deposited?

    Using our service, we will always post funds to the earliest date possible while maintaining the 2 business day lead time. If checks are approved on Wednesday before 5:00 p.m. PT for a Saturday pay date, they will post on Friday. If checks are approved on Thursday before 5:00 p.m. PT for a pay date of Saturday, they will post on Monday. The final decision is ultimately made by the receiving bank and funds could not post as expected.
     
    Intuit Online Payroll recommends to use a pay date of when the funds will actually post to the employee accounts, using the 2 business day lead time. Not only does this help clear up confusion, but should be done anyway due to the law of constructive receipt (noted in page 9 of IRS Publication 538).
     
    Direct deposit dated for a bank holiday acts in the same manner as a weekend date (see above).

    Special situations

    How do I delete a direct deposit paycheck?

    Important:
    • You cannot undo a paycheck deletion. To restore the paycheck, you'd need to recreate it.
    • Voiding a direct deposit paycheck or contractor payment does not reverse the money movement of the original transaction. It only adjusts your payroll records for accounting purposes. You generally need to have the employee or contractor reimburse you for the net pay amount.
       
    • There are several items to be aware of when deleting or voiding paychecks in prior periods (that is, in prior quarters for which you've already paid taxes and filed forms):
      • It will change your tax liabilities for those periods. You may owe additional, late tax payments that are subject to penalty and interest. You may also need to prepare and file amended forms. (Online Payroll doesn't support preparation of amended forms.)
      • If you intend to delete/void paychecks and then re-enter them, you'll generally be blocked from performing the re-entry yourself. Payroll Support would need to do it for you. (The blocking is due to state unemployment insurance (SUI) tax payments. If you pay SUI manually (non-electronically), you may be able to temporarily delete the payments, re-enter the paychecks, and recreate the payments.)
      • If you intend to delete/void paychecks for a prior year, you'll need to prepare and file amended annual forms, including federal Forms W-2 and 940. The affected employees would also need to prepare and file corrected versions of Form 1040.
     
     
    To delete a direct deposit paycheck:
     
    1. Click Reports.
    2. Click Paycheck List.
    3. Click the check date.
    4. Click Delete.
    5. Click Yes to confirm the deletion.
    Note: Direct deposit paychecks can be deleted up until they start to process. If Delete does not appear as an option, contact Payroll Support for assistance.

    How can I turn off direct deposit for just one check?

    If you have set up direct deposit for an employee, but want to manually create a paper check for one payroll, follow these steps:
    1. On the Create Paychecks screen, click the Check Details icon to the right of the employee's name.
    2. Deselect Use direct deposit.
    3. Enter the employee's paycheck information.
    4. Click Create.
    5. The employee's check will not be marked for direct deposit. You'll be asked to enter a check number before printing.
    For a contractor:
     
    1. Click Employees.
    2. Click the contractor's name.
    3. To the right of Pay Method, click Direct Deposit.
    4. In the Payment Method section, select Check, and click Ok.
    5. Create the contractor's check.
    6. Repeat steps 1-2.
    7. To the right of Pay Method, click Check.
    8. In the Payment Method section, select Direct Deposit, and click Ok. (Do not re-enter the contractor's bank account information since it's already saved in the system.)

    I received an error message that my direct deposit is larger than normal and to contact customer support.

    We set a security limit to help protect you from fraudulent ACH activities by capping the amount you can send using our direct deposit services. This limit is set based on your average payroll. Follow Security Limit Increase for IFSP, IOP. and QBOP article to request an increase in your security limit.
     

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