QuickBooks Payroll Bulletin | March 2007

Update Your State Unemployment/State Disability Insurance Rates and Make Liability Adjustments

QuickBooks Payroll subscribers must update their state unemployment insurance (SUI) rates in QuickBooks themselves. Many states send these rates to employers after the new year, but the rates can be retroactive to the beginning of the year (see chart). The QuickBooks Payroll tax table does not include updates to SUI rates, because states assign each employer a unique rate based on their employment history.

Jan. Feb. Mar.
AZ, DC, GA, MD, RI, SC KY, LA, MS, NY, PR CT, HI, SD
Apr. May Jun.
VT
Jul. Aug. Sep.
NH NJ, OK, TN
Oct. Nov. Dec.
WI CO, FL, IL, IN, IA, MO, NC, OH, OR, UT AL, AK, AR, CA, DE, ID, KS, ME, MA, MI, MN, MT, NE, NV, NM, ND, PA, TX, VA, WA, WV, WY

Employers located in states that have state disability insurance (SDI) may also need to update their SDI rates themselves. For some states, however, the state disability insurance rate is supplied by the tax table, and you cannot edit it. You can check which states' disability insurance taxes are supported. If the rate changes, check to see if you have the current tax table.

Update your SUI or SDI rates in QuickBooks by editing the appropriate payroll item:

  1. In QuickBooks 2007: Select Manage Payroll Items, and then choose View/Edit Payroll Item List.
    In QuickBooks 2004-2006: From the Employees menu, choose Payroll Item List.
  2. Select your SUI or SDI payroll item.
    If your state disability insurance is collected by a private agency, the associated payroll item may be set up as other tax, not state disability. How do I edit the rate of a user-defined other tax payroll item?
  3. From the Payroll Item menu button, choose Edit.
  4. Click Next in the Payroll Item Setup wizard until you see the tax rate window.
  5. Enter the new rate in the Company rate or Employee rate field.
  6. Click Next until you can click Finish.

Note: Most states update their rates only at the beginning of each year, but if you're in a state that changes rates throughout the year (such as New Jersey), remember to update the rate when you get your state notice.

If your state sends your rate change notice before the tax filing due date, and the change is retroactive to the beginning of the year or the quarter:

  1. Change the rate in QuickBooks (prior to running your next payroll).
    1. If you will be running payroll in the current quarter, QuickBooks will self-adjust your payroll tax for rate increases using the rate entered on the payroll item (from step 1, above, change the rate in QuickBooks). If the rate decreased, you will see less or no tax calculated to adjust for the difference.

      Or

    2. Enter tax adjustments for each employee (if applicable) for the affected period. (For detailed instructions, see the topics "Running the Payroll Checkup" and "Adjusting the liability balance for payroll items" in QuickBooks Help.)

If your state sends your rate change notice after the tax filing due date and the change is retroactive to the beginning of the year:

  1. Change the rate in QuickBooks (prior to running your next payroll).
  2. Enter tax adjustments for each employee (if applicable) for the affected periods. (For detailed instructions, see the topics "Running the Payroll Checkup" and "Adjusting the liability balance for payroll items" in QuickBooks Help.)
  3. If your SUI rate changed, you may need to file an amendment and pay additional taxes due. Your actions will depend on what your state requires.

Note: If payroll was processed prior to entering any tax adjustments (step 2, just above) in a quarter after the rate change was made, QuickBooks will self-adjust in the quarter the checks are dated. If the rate increased, you will see additional taxes calculated. If the rate decreased, you will see less or no tax calculated to adjust for the difference.

QuickBooks Payroll Bulletin
Editor: Lise Quintana
Publisher: Intuit
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