Taxes

Hi there, dso0216 and MillyN

Allow me to share and make sure that you're able to file the form with the correct amounts in QuickBooks Desktop Payroll.

The amounts shown on Line 4 (exempt payments) are usually for payroll items that were not taxed for Federal Unemployment Insurance. Fringe benefits, Group Term Life Insurance, Retirement plans, Dependent care, and other exempt payments are all included.

To ensure that the exempt payment is calculated on your 940 forms, we must first correct the payroll items. We'll start by fixing the tax tracking type or Federal Unemployment (FUTA) tax on the payroll item that should be exempt from FUTA.

Here's how:

1. Go to Lists menu, then Payroll Item List.
2. Right-click the payroll item and hit Edit Payroll Item.
3. Click on Next until you get to Tax Tracking Type.
4. Make sure the tax tracking type selected matches the payroll item used. Don’t use tax tracking type Other.
   • If the tax tracking type is correct, go to Step 5.
   • If the tax tracking type is incorrect, select the correct one, then select Next twice, then Finish. 
5. Tap Next.
6. From the Taxes window, review the Federal Unemployment tax.
   • If Federal Unemployment is unchecked, check it
   • If Federal Unemployment is checked, uncheck it
7. Select Next, then Finish.

Once done, you can proceed to the next step (Step 3: Fix your employee wages) outlined in this link: Troubleshoot Part 2 on Form 940 in QuickBooks Desktop Payroll Enhanced.

I've also added this article as a reference if you need to make an adjustment: Adjust payroll liabilities in QuickBooks Desktop Payroll.

Get back to us if you need further assistance with payroll. I'd be glad to help you out. Take care and have a reat day!