Easy Ways to Fix QuickBooks Not Calculating Unemployment Correctly

Update QuickBooks Desktop And Payroll
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Updating both the desktop software and payroll ensures that you have the latest tax forms and tables so that QuickBooks can calculate taxes and unemployment on the basis of the latest rates for your state.

To update the QuickBooks desktop, follow these steps:

💠 Go to the Help menu.
💠 Click on Update QuickBooks Desktop.
💠 Go to the Get Updates tab.
💠 Click on Reset Updates.
💠 Click on Update QuickBooks.

Wait for the updated files to download. Then exit QuickBooks and click on Yes to begin the installation of the updated files.

To get the latest tax tables so that QuickBooks can correctly calculate unemployment, follow these steps:

💠 Go to the Employees menu.
💠 Choose Get Payroll Updates.
💠 Mark the checkbox for Download Entire Update.
💠 Click on Download Latest Update.

Go through the window that appears after the update is complete. You may get some useful information about the changes that have been introduced by your state or federal government in regard to tax calculation and filing.

Verify State Unemployment Error
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Let’s now try to figure out the underlying cause for the incorrect calculation of state unemployment.

Here are the steps to verify the error leading to QuickBooks not calculating unemployment correctly:

Verify state taxes for employees

Let’s see if you’ve got the correct state taxes set for your employee so that QuickBooks can calculate unemployment correctly:

💠 From the Employee’s center, choose the employee and double click on his or her name.
💠 Click on Payroll Info.
💠 Click on Taxes.
💠 From the State tab, go through the following items and their preferences:
+ State worked
+ State unemployment rate
+ State subject to Withholding
+ Filing status
+ Number of allowances
+ Extra withholding
💠 After verifying the preferences and making the necessary changes, click on Ok.

Check the State Unemployment Rate

The state unemployment rate, if incorrectly entered, is going to result in inaccurate calculation by the accounting software. Further, the steps to edit the state unemployment rate differ on the basis of the Intuit payroll service that you use with your desktop accounting software.

To verify the state unemployment rate in QuickBooks, follow these steps:

💠 Go to the Lists menu.
💠 Choose Payroll Item List.
💠 Click on State Unemployment.
💠 Click on Next, then Next again.

If the state unemployment rate is incorrect, follow these steps to change the rate in QuickBooks Desktop Payroll:

💠 From the Lists menu, click on Payroll Item List.
💠 Find the abbreviation of your state and double-click on Unemployment Company.
💠 Click on Next.
💠 When you reach the Company tax rates page, enter the correct state unemployment rate for each quarter of the financial period.
💠 Click on Next, then Finish.

Each employee in QuickBooks has his or her own unemployment wage base limit. Once this limit is reached, the calculations for unemployment can become incorrect in QuickBooks.

So let’s verify the wage base for employees:

💠 Go to the Reports menu.
💠 Choose Employees and Payroll.
💠 From the provided options, choose Payroll Summary Report.
💠 Enter the period of time for which you want to create the report. The recommended range is year-to-date.
💠 Go to the Employee’s state unemployment rate and double-click on the amount.
💠 View the Transactions by Payroll Item report.
💠 Click on the Wage Base column, then verify that the employee hasn’t actually reached the unemployment wage bases limit.

QuickBooks stops calculating SUI for any employee who’s reached the wage base limit for the current fiscal year. After calculating the cap on the earnings for each employee, QuickBooks sets the wage base limit for each employee. When the cap reaches, QuickBooks stops or increases the tax depending on the preferences set by the user. However, if the wage base rate was recently changed by your state or the federal government, then the calculation of the SUI will start once again when you install the latest tax tables.

Here are some points that you should note if you’ve already issued the check:

💠 Modify the SIT value on the individual’s following payment once extra or under-collected.
💠 Whenever you generate a fresh salary, you may modify the SIT value (to lower or raise) in the Sample Paycheck screen.
💠 Do not alter the number on the check if the SUI was already over or under-collected.
💠 You should discover the differences in SUI computations in order to try to seek and repair them.
💠 You may use a salary check as a quick solution to checking expense reports to discover irregularities.
💠 It’s critical to generate a second copy of your data source before running a paycheck inspection to secure your information in the event of an accident.