To pay non-tax obligations, including health insurance premiums, contributions, and child support, QuickBooks Online does not generate a check. These payments must be generated from the Check screen. To do so, follow these steps:
- Choose the Plus symbol.
- Check the box.
- Select the bank account for liability payments from the Bank Account drop-down menu.
- Select the vendor from the Pick a payee drop-down menu.
- Select the account you use to manage your liability payments in the Account details section, then enter the number.
- If you have sub-accounts for each department you’re paying, make sure to point to them and enter the required amount for each one.
Child support deduction from paycheck
You may have received a letter indicating that owing to unpaid tax debts, and you may subtract an extra tax amount from an employee’s paycheck. The Wage Garnishment Order will provide instructions on how to post the money, such as the account or case number.
If you have several workers who are being garnished, you can build a new payroll item for each of them. In the name of the payroll object, the employee’s initials may be used, for example, TAX LEVY-AKA. Attachments are generally honoured/paid in the order listed below (exceptions can apply). The American Payroll Association is a non-profit organisation that promotes
- Orders for child support
- Orders under Chapter XIII of the Bankruptcy Code
- taxes levied by the federal government
- Garnishments by federal agencies
- Taxes imposed by states
- Taxes imposed locally
- Garnishments against creditors
- Garnishment of student loans
Expected Result: You’ll be able to pay the relevant agency as a liability in QuickBooks Desktop after the garnishment has been deducted from the paycheck.
Prejudices: You know how much you want to subtract from the garnishment.
Please note that if you have more than one employee with a wage garnishment, you must create different payroll items for each garnishment because liability authorities need a case number to determine how much is paid for each employee.
To create a garnishment deduction item using EZ Setup or Customer Setup, follow these steps:
- Select Payroll Item List from the Lists menu.
- Select New from the Payroll Item drop-down menu.
- Click Next after selecting EZ Setup or Custom Setup. (Follow the onscreen directions for EZ Setup.)
- Click Next after selecting the Deduction option.
- Click Next after giving the payroll deduction a name, such as Child Support Smith for employee Bob Smith.
- Enter the name of the firm that is responsible for the payment of the liability. If you don’t know the agency’s name right now, you can add it later.
- Next should be selected.
- Pick None from the Tax Tracking Type drop-down arrow unless your accountant tells you otherwise.
- Next should be selected.
- Select Next in the Default Taxes browser.
- Make sure Neither is selected in the Calculate Based on Quantity window before clicking Next. Note: If you choose Hours or Quantity, the garnish will not be calculated correctly.
- Choose Net in the Gross vs Net window to measure the balance after taxes. If you choose Gross, the deduction will be calculated before taxes.
- Set a Default Rate and Set a Cap (if there is one).
- Attach the percentage symbol if it’s a percentage.
- If the sum is in dollars, add the decimal.
- Finish by clicking the Finish button.
To create the Garnishment Deduction Item on the employee’s record (for example, for child support), follow these steps:
Please note that you need to switch QuickBooks Desktop to single-user mode to complete the tasks below.
- Select Employee Center from the Employees drop-down menu.
- Double-click on the name of an employee.
- Select the Payroll Info tab from the drop-down menu.
- Pick your new garnishments item in the Additions, Deductions, and Company Contributions section by clicking in a blank area under Item Name.
- Enter the amount to be deducted from each paycheck in the Amount section.
- Click the OK button.
Please note that if the garnishment item has been changed, you may need to remove the old garnishment item from the employee setup and replace it with the new garnishment item.
In conclusion, QuickBooks Desktop software helps you understand how you can manage the books and accounts of a particular organisation. I hope that this blog helped you in some way or the other and was worth your time.