Fix W-4 or Payroll Info Errors for Employees in QuickBooks Desktop Enterprise Payroll

A QuickBooks Payroll Service is a subscription you need to activate to enable the payroll features in your QuickBooks Desktop software. To check this, go to the Service Key page and ensure your service key is active.

1. Close all your company files and restart your computer.
2. Open QuickBooks, navigate to Employees, select My Payroll Service, and then click on Manage Service Key.
3. Make sure your Service Name and Status are accurate and displayed as Active.
4. Click Edit and verify the service key number in case it shows as Canceled and enter the correct service key if it’s incorrect.
5. Select the Next tab and uncheck the Open Payroll Setup box, then click Finish.

Form W-4 includes some personal information that you must have available, which includes: 

• Name and mailing address
• Social Security number (SSN)
• Filing status or marital status—single, married filing jointly, head of household, qualifying widower, or married filing separately
• Total earnings

Note: Provide details about any extra amount withheld from the paycheck or indicate if the employee is exempt from tax payments.

To resolve this error, update your software to the latest release. 

1. Open QuickBooks Desktop and navigate to the Help menu.
2. Choose Update QuickBooks Desktop.
3. Click the Update Now tab. Tip: Tickmark the Reset Update checkbox to clear all previous update downloads.
4. Select Get Updates to start the download.
5. Once done, close and reopen QuickBooks to install the update again. 

Download the latest payroll tax table updates to ensure accurate and compliant tax withholding for employees.

1. Choose Update QuickBooks from the Help menu
2. Select the Update Now tab.
3. Click Get Updates.
4. Go to File and click Exit.
5. Restart QuickBooks Desktop.

Note: You will not find a web patch for the 2024 tax table updates. You must install them directly through QuickBooks.

In QuickBooks Desktop Payroll, your SUI rate isn’t part of the normal tax table updates. You need to update it manually.

1. Navigate to the Lists menu > select Payroll Item List.
2. Click twice on[state abbreviation] – Unemployment Company.
3. Select Next until you reach the Company tax rates window.
4. Enter the correct rates for each quarter.
5. Choose Next and then click Finish.

1. Navigate to Window > click Close All.
2. Open the File menu > select Utilities.
3. Choose Verify Data. When you see:
   • QuickBooks detected no problems with your data—your data is clean, and there’s nothing else to do with it.
   • An error message—look for it on the QuickBooks Desktop support site for how to fix it.
   • Your data has lost integrity—Data damage was found in the file. Rebuild your data to fix it.

Note: Contact the QuickBooks Support Team before you rebuild your data in case you use Assisted Payroll.

1. Navigate to File > Utilities > select Rebuild Data.
2. QuickBooks will ask to create a backup before it rebuilds your company file. Click OK. A backup is required before you rebuild.
3. Choose where you want to save your backup, then click OK. Don’t replace another backup file. Enter a new name in the File name and select Save.
4. Click the OK tab when you receive the message Rebuild has completed.
5. Move to File, select Utilities, then choose Verify Data again to check for additional damage.
   • When the verify tool finds more damage, fix it manually. Look for the error(s) in the qbwin.log on the QuickBooks Desktop support site for how to fix them.
   • When your error can’t be found, restore a recent backup. Go to File, then choose Open or Restore Company.

Note: Avoid replacing your existing company file and re-entering the info into your company file after the backup was created.

The payroll summary report provides you with the total payroll wages, taxes, deductions, and contributions. Create a payroll summary report for the current calendar year to determine the YTD amount of the incorrect payroll item for each employee.

Note: The dates in this report are by paycheck dates only, not pay period dates.

1. Move to Reports > choose Employees & Payroll.
2. Select Payroll Summary.
3. Adjust the date range appropriately.
4. Click on Total only in the Show Columns dropdown menu.

Run a payroll summary by employee in case you want to see the payroll wages, taxes, deductions, and contributions totaled by employees.

1. Navigate to Reports > select Employees and Payroll.
2. Choose Payroll Summary.
3. Adjust the date range appropriately.
4. Click Employee in the Show Columns dropdown. 
5. Opt for the Customize Report tab, then click Filters.
6. Under the Choose Filter section, scroll down to select Name from the filter list.
7. Select the employee from the Name dropdown menu.
8. Click OK.

Enter your employee’s W-4 info in QuickBooks Desktop and do the following:

1. Go to Employees > click Employee Center.
2. Choose the name of the employee.
3. Select Payroll Info, then click Taxes.
4. On the Federal tab, choose the applicable form in the W-4 Form dropdown.
5. Enter the employee’s W-4 info. When they claim exemption on their W-4, select Exempt under the Filing Status dropdown menu.
6. Click OK to save.

Create a Journal Entry to remove the overpaid amount in your checking account.

1. Navigate to the Accountant > choose Make General Journal Entries.
2. Write down the DATE and the ENTRY NO. of your journal entry.
3. Select your checking account and payroll account under the ACCOUNT column.
4. Enter the overpaid amount for your checking account under the CREDIT column.
5. Enter the overpaid amount for your payroll account under the DEBIT column. 
6. Type the name of your employee.
7. Click Save & Close.

Manually calculate the gross wages or create a new Salary Item for the underpaid employee. Use the Salary Item only with the “Enter net/Calculate gross” option, so set up a new item if needed.

1. Navigate to the Lists menu.
2. Click on Payroll Item List.
3. Select New from the Payroll Item drop-down menu.
4. Select Custom Setup. Then, click Next.
5. Choose Wage and click the Next tab.
6. Click the Annual Salary tab and select Next.
7. Select the type of pay. Vacation Pay and Sick Pay are each specific options. All other types of pay should be entered as Regular Pay.
8. Click Next, follow the on-screen instructions, and click the Finish icon.

Now, create payroll for the underpaid employee, use the newly created Salary Item, and write down the amount you paid for the employee.

1. Go to the Help menu.
2. Select About QuickBooks.
3. Hold and Press Ctrl + Alt + Y on your keyboard, then click Next.
4. From the Employee Summary Information window, choose the employee who was underpaid.
5. Double-click on the employee’s name.
   • Select hourly wage as the pay type under the YTD Adjustment window. 
   • Enter the figures and hours from the temporary Net-To-Gross check.
   • Write down the tax amount.
   • Click the Account Affected button.
     • When the manual paycheck is already recorded in your register, choose the Affect Liability and Expense account, but not the bank account.
     • When the manual paycheck is not yet recorded on your bank register, select Affect liability, expense and bank accounts.
   • Choose the OK tab.

6. Review the YTD Adjustment details.
7. Click OK.

Before you start, create a backup copy of the company file to prevent accidental loss. To delete the worker’s information, do the following:

1. Under your company file, navigate to the Employees menu > select Employee Center.
2. Click the New Employee button at the top of the screen.
3. Fill out the employee’s applicable information in the appropriate tabs, including full name, gender, date of birth, Social Security Number, contact information, and compensation.
4. Click OK when you’ve finished adding the new worker.

After this, merge the worker’s profile. For this, select QuickBooks Desktop for Windows and go for the Merge entries in the Chart of Accounts, Item List, Customer List, Vendor List and Employee List.

1. Move to Lists and then choose the list that has the entries you want to merge.
2. Copy the name of the entry you wish to keep.
3. Click right on the entry you don’t want to use and click the Edit tab.
4. Paste the name you copied, then click Save & Close.
5. Select Yes to merge the entries.