Payroll Support

The Tennessee Employment Security Division increased its unemployment insurance wage base limit to $9,000 from $7,000 for tax year 2009. Details are provided in the following Notice. Intuit QuickBooks Payroll is releasing Payroll Update 20918 to comply with this change.

In addition to the wage base limit increase, the agency added a temporary additional fee of 0.6% on all unemployment insurance premium rates on Premium Tables 1, 2, and 3.  The agency has sent out Employer Statements for the amount of tax due based on the additional 0.6% rate applied to the taxable wages reported for the first quarter 2009.  The additional tax due for first quarter 2009 must be paid by July 31, 2009, in order to avoid having interest of 1.50% applied to the balance due amount.

Frequently Asked Questions

How do I know if I'm affected?
You may be affected if:

• You pay Tennessee State Unemployment Insurance (SUI) taxes on behalf of  your employees; and
• At least one of your employees have exceeded the wage base limit of $7,000

1.    in the first quarter (01/01/2009-03/31/2009) or
2.    by the end of the second quarter (06/30/2009).

If these conditions apply, refer to the instructions below. If needed, consult with your accountant or tax advisor for guidance. 

Will I have to amend my first quarter Contribution Report if one or more of my employees have exceeded the $7,000 wage base limit?

Yes. Because Intuit QuickBooks Payroll is programming the wage base limit change with an effective date of January 1, 2009, an amendment to the first quarter Premium Report will be necessary if one or more of your employees have exceeded the $7,000 wage base limit.

What steps do I need to take?

1. Download and install Payroll Update 20918 as soon as it is released.
2. Enter the total Company rate for SUI, which includes the additional fee rate of 0.6%, in each of the Company rate boxes.  Note:  Not applicable to the standard 2.7% new employer rate.
3. Run Payroll Checkup and enter resulting Payroll Liability Adjustments.
4. Prepare an amendment for first quarter only if you have employees that earned more than $7,000 by the end of the first quarter. 

Step 1 - Download and install Payroll Update 20918 as soon as it is released

If you have Automatic Updates turned on and have selected all updates to download automatically, your QuickBooks software will download and install the update for you.  If you do not have Automatic Updates turned on, you can download this payroll update manually.  For more information on how to download and install a Payroll Update, click here.

If you subscribe to the Disk Delivery service, the next Disk Delivery is scheduled for mid-August 2009. If you have internet access, you may want to download Payroll Update 20918. For more information on how to download and install a Payroll Update, click here.

Step 2 ? Enter your SUI rates for 2009 (Note:  This step is not applicable if you have the standard 2.7% new employer rate)

1. From the Payroll Item List, select TN - Unemployment Company
2. Click Next to get to the Company tax rates for 2009 screen.
3. Enter the total Company rate by adding the additional fee rate of 0.6% to your assigned Company rate in each of the following Company rate boxes: For 1/1 ? 3/31, For 4/1 ? 6/30, For 7/1 ? 9/30, and For 10/1 ? 12/31.
4. Continue to click Next, and then click Finish.

Step 3 ? Run Payroll Checkup

Backup your Company File

1. Go to the File menu and click on Save Copy or Backup.
2. Select the Backup copy radio button; click Next.
3. Select the Local backup radio button; click Next.
4. Select the Browse button to indicate where you want to save the backup copy.
5. Select the remainder of options as appropriate; click OK.
6. Select the Save it now radio button; click Next and Save.

Ensure you have a copy of your first quarter Premium Report.

Generate and print a Payroll Detail Review report to identify employees who have exceeded the $7,000 wage base limit. 

1. Go to the Reports menu, highlight Employees and Payroll and then click Payroll Detail Review.
2. Select the Display tab. In the Report Date Range section, change the period covered by selecting Custom on the Dates drop-down and entering 01/01/2009 to 03/31/2009 for first quarter 2009.
3. In the Columns section, select (left margin), Entered/Last Modified, Date, Name, Payroll Item, Income Subject to Tax, Wage Base, Payroll Tax Rate,  Amount, and Tax Table Version.
4. Select the Filters tab. In the Choose Filter section, highlight Payroll Item on the Filter drop-down list.
5. Then select TN ? Unemployment Company on the Payroll Item drop-down list. Print a copy of the report.
6. Run a report for second quarter 2009 by selecting Last Calendar Quarter (04/01/2009 to 6/30/2009) on the Dates drop-down list.
7. Run another report for third quarter by selecting This Calendar Quarter (07/01/2009 to 9/30/2009) on the Dates drop-down list. Print a copy of the report.

Run Payroll Checkup

1. Go to the Employees menu, highlight My Payroll Service and then click on Run Payroll Checkup.
2. Click through Items 1 and 2.
3. For Items 3, 4 and 5, review any items that are marked with Information is missing and fix any items that are marked with Fix this item now.
4. For Item 6, click on the Yes radio button; click Continue twice.
5. Repeat the prior step, #4, to refresh the error report.
6. To view the error(s) for the Prior Quarter Wages, click on the View Error button.
7. Print the report.
8. Exit Payroll Setup by clicking on the Finish Later button.
9. Since Payroll Checkup combines the tax due amount for the first and second quarters in the Prior Quarter report (see Discrepancy column), you will need to calculate the actual tax due amount for the first and second quarters, respectively.
10. Go to ?Payroll Liability Adjustments? below.
11. If there are no errors for the Prior Quarter Wages, you will receive the following message: No errors were found in your payroll data for past quarter. Click Continue.
12. Go to ?Re-enter Payroll Checkup? below.

Payroll Liability Adjustments are needed to correct all discrepancies for the prior quarter(s).

1. Go to the Employees menu, highlight Payroll Taxes and Liabilities and then click on Adjust Payroll Liabilities.
2. In the Date field, enter the date for which you are making the adjustments: 03/31/2009 for the first quarter.
3. In the Effective Date field, enter the date that you want this adjustment to affect your liability balance: 03/31/2009 for the first quarter.
4. Select the Employee radio button and choose the employee?s name from the drop-down list (refer to error report).
5. In the Item Name field, choose TN ? Unemployment Company.
6. In the Amount field, enter the amount of the adjustment as a positive number (refer to your manual tax due calculation for the first quarter on the Prior Quarter report). 
7. In the Memo field, enter a note to yourself about the adjustment, i.e. adjustment due to wage base increase
8. Click Next Adjustment if additional adjustments are needed. 
9. When you have finished adjusting the tax liability for each affected employee, click OK.
10. Repeat Items 1 through 9 to enter your second quarter liability adjustments, if any. Use 06/30/2009 to reflect the second quarter liability adjustment date. 

Re-enter Payroll Checkup

1. Once you have reached Item 6, click on the Yes radio button; click Continue twice.
2. If all errors for the Prior Quarter Wages have been fixed, you will receive the following message: No errors were found in your payroll data for past quarter. Click Continue.
3. If there are errors for the Prior Quarter Wages, click on the View Error button to view the error(s) for the Prior Quarter Wages.
4. Print the report.
5. Exit Payroll Setup by clicking on the Finish Later button.
6. Go to Payroll Liability Adjustments section above to enter any payroll tax adjustment.
7. If there are no errors for the Current Quarter Wages, you will receive the following message: No errors were found in your payroll data for current quarter.
8. Generate and print Payroll Detail Review reports for the first and second quarters.
9. Verify that adjustments to wage bases and tax amounts are correct for each affected employee, for each affected quarter.  

Step 4 ? Prepare your first quarter amendment

Generate and print a Payroll Item Detail report for the first quarter.

1. Go to the Reports menu, highlight Employees and Payroll and then click on Payroll Item Detail.
2. Select the Display tab. In the Report Date Range section, change the period covered by selecting Custom on the Dates drop-down and entering 01/01/2009 to 03/31/2009 for first quarter 2009.
3. In the Columns section, select (left margin), Entered/Last Modified, Date, Name, Payroll Item, Income Subject to Tax, Wage Base, Payroll Tax Rate, Sales Price, Amount, and Tax Table Version.
4. Select the Filters tab. In the Choose Filter section, highlight Payroll Item on the Filter drop-down list.
5. Then select TN ? Unemployment Company on the Payroll Item drop-down list.
6. Print a copy of the report.

For Basic Payroll and Standard Payroll

1. Make a copy of your 2009 first quarter Premium Report that you filed with the agency.
2. Line 3-Net Taxable Wages. Cross out the original figure and write in the TOTAL Wage Base as provided on the Payroll Item Detail Report.
3. Line 2-Less Excess Wages. Calculate excess wages by subtracting Line 2 from Line 3. Cross out the original figure and write in the new figure.
4. Line 4?Premium Due. Calculate new total tax due for the quarter. The tax due should equal to the TOTAL Amount from the Payroll Item Report. Cross out the original figure and write in the new figure.
5. Line 10 ? Enter the Exact Amount of Payment Submitted with this Report.  Cross out the original figure and write in the additional tax due for the quarter.
6. On the top left corner of the Premium Report, write Amended Return.
7. File & pay your amended first quarter Premium Report on or before July 31, 2009.  If you are including the additional amount due for the additional fee on your amended return, include the Employer Statement sent by the Agency with your amended return.

Second quarter Premium Report

1. When it is time for you to prepare your second quarter Premium Report, follow your normal process. 
2. File & pay your second quarter Premium Report on or before July 31, 2009.
3. If you have already filed your second quarter 2009 Premium Report, repeat Step 4. When preparing your Payroll Item Detail Report, use the date rate of 04/01/2009 to 06/30/2009 for the second quarter 2009 and make a copy of your 2009 second quarter Premium Report.

For QuickBooks Enhanced Payroll

1. Go to Employees, highlight Payroll Tax Forms & W-2s and click on Process Payroll Forms.
2. Click on the State form radio button; click OK.
3. Select TN in State drop-down.
4. Select LB-0456 ? Premium Report.
5. Select Custom in the Quarter drop-down and enter 03/31/2009 for the Quarter Ending Date; click OK.
6. Line 10 ? Enter the Exact Amount of Payment Submitted with this Report.  Override the tax amount due with the additional taxes due for the quarter.
7. Process, print and save the first quarter Premium Report.
8. Mark your amended first quarter Premium Report with:  Amended Return.
9. File & pay your amended first quarter Premium Report on or before July 31, 2009.  If you are including the additional amount due for the additional fee on your amended return, include the Employer Statement sent by the Agency with your amended return. 

Second quarter 2009 Premium Report

1. When it is time for you to prepare your second quarter Premium Report, follow your normal process. 
2. File & pay your second quarter Premium Report on or before July 31, 2009.
3. If you have already filed your second quarter 2009 Premium Report, repeat Step 4. When preparing your Payroll Item Report, use the date range of 04/01/2009 to 06/30/2009 for the second quarter.