My payroll tax was set incorrectly. I withheld state disability unnecessarily. How do I repay my employees?

I have two employees who had California State disability tax withheld. We are excempt from that tax. I have adjusted my liability payment but it still shows as owed in my liability report. I also need to repay the employees who were incorrectly affected.

Answer

You have two places to fix this.

Edit your Employee Defaults and make sure this is set up properly. This is used for each new Add Employee, so this is the First place it seems to be wrong.

Now edit each existing name and fix it for that person, since it is already wrong here.

"I have adjusted my liability payment"

How did you "adjust" this? You should not have taken any action, since you are Giving Back the money in the paychecks, next time.

"but it still shows as owed in my liability report."

That happens when someone makes the wrong kind of entry. You should not have made Any Entry, because you want to give it back.

"I also need to repay the employees who were incorrectly affected"

You will use the deduction item in the Opposite, on the next paycheck; you click on the item, in the Unshaded part at the bottom in the details and Add Back the total you owe to them.



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