The State Unemployment Tax rate is set by your state; most of the states update their unemployment tax rates at the beginning of the year. It is an essential component while filing taxations for the year.
Things that you need to know about Unemployment Tax rates
- This tax rate is something which is unique to your business and is only issued by your state.
- This rate is not a part of the Tax Table update and is highly critical that you update the current rate in QuickBooks Desktop.
- This Tax is only paid by the employer, until and unless you are in the state where the employees need to contribute.
- The Unemployment Tax rate wage limit is updated by the Tax table in accordance with your state’s requirement, and this is something which cannot be manually changed.
The state often sends a notification when there is a change in the rates of the unemployment tax. It is often seen that a majority of states attach a surcharge or assessment to the State Unemployment. The users can learn more about this by connecting with QuickBooks customer care number, where they would get a clear understanding of how things work.
The process to change the State Unemployment Tax
The steps that you would have to undertake to change the State Unemployment tax are as follows.
- Open the QuickBooks software on your system, and then from the Lists menu, select the Payroll item list.
- Then you would have to double-click the State Unemployment Tax item.
- Now click the option of ‘Next’ and then the correct rates for each quarter in the Company Tax rate column.
- Further, in the latter half of the year, you would get a field for the Company Tax rates that would allow you to add rates for the first quarter of the following year.
- If you come across the Payroll Tax Rate Change warning, indicate that you are changing the tax rate for the current quarter and then press on ‘Continue.’
- Now click on finish to close the window.
How to change the Unemployment Tax rate in the current or prior quarter
If you wish to change the tax rate for the current or prior quarter, QuickBooks Desktop does not automatically adjust the tax amounts collected from any employee who has already reached the wage limit before the rate change. You would have to manually adjust the tax amount for each affected employee for each quarter affected.
To adjust the tax wage bases or amount reported for your employees, you would first have to create a payroll report to determine these numbers.
The steps that you would have to shadow are:
- In the Reports menu, you would have to choose the option of Employees and Payroll.
- Further access the option of Payroll Item Detail.
- Now set the date to have a look at each affected quarter.
- Now select the Customize Report option and select the following:
- Source Name
- Payroll Item
- Wage Base
- Now further select the Filter tab and choose the Payroll Item, which would be State Unemployment item.
- Now find the Total Wage Base column for the tax and multiply it by your current rate.
- You would have to then match the results with the amount calculated.
If you face any issue in undertaking the steps, then you would have to connect with QuickBooks technical support number. The professionals would then provide you with the best applicable solutions to resolve the issue.